Every powerful trend eventually meets an obstacle it cannot immediately overcome. For the GBPUSD rally, that obstacle has appeared in the form of a major daily break of structure level. The upward momentum has stalled, and the price action is now signaling a potential correction. This analysis breaks down the high-probability short setup that has formed at this critical juncture.
The bullish move on the GBPUSD pair was halted by the daily Break of Structure (BOS D) level. The liquidity sweep from this level was carried out via a manipulation in the form of a 4H order block.
A mitigation of and reversal reaction from this order block would confirm the price's intention to correct, at a minimum, to the daily FVG below.
As an additional condition for opening a short position from this zone, I am considering the 61.8% or 78.6% local Fibonacci retracement levels.
► The first potential entry scenario involves the price reaching the 61.8% level and finding acceptance below it.
► If this level is broken, the second scenario will come into effect, which involves the price reaching the 78.6% level, also with a confirmed hold below it.
► Invalidation: The invalidation of the short scenario would be a break of the 78.6% level.
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The principles and conditions for forming the manipulation zones I show in this trade idea are detailed in my educational publication, which was chosen by TradingView for the "Editor's Picks" category and received a huge amount of positive feedback from this insightful trading community. To better understand the logic I've used here and the general principles of price movement in most markets from the perspective of institutional capital, I highly recommend checking out this guide if you haven't already. 👇
P.S. This is not a prediction of the exact price direction. It is a description of high-probability setups that become valid only if specific conditions are met when the price reaches the marked POI. If the conditions are not met, the setups are invalid. No setup has a 100% success rate, so if you decide to use this trade idea, always apply a stop-loss and proper risk management. Trade smart.
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Have a question or your own view on this idea? Share it in the comments. 💬
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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The bullish move on the GBPUSD pair was halted by the daily Break of Structure (BOS D) level. The liquidity sweep from this level was carried out via a manipulation in the form of a 4H order block.
A mitigation of and reversal reaction from this order block would confirm the price's intention to correct, at a minimum, to the daily FVG below.
As an additional condition for opening a short position from this zone, I am considering the 61.8% or 78.6% local Fibonacci retracement levels.
► The first potential entry scenario involves the price reaching the 61.8% level and finding acceptance below it.
► If this level is broken, the second scenario will come into effect, which involves the price reaching the 78.6% level, also with a confirmed hold below it.
► Invalidation: The invalidation of the short scenario would be a break of the 78.6% level.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The principles and conditions for forming the manipulation zones I show in this trade idea are detailed in my educational publication, which was chosen by TradingView for the "Editor's Picks" category and received a huge amount of positive feedback from this insightful trading community. To better understand the logic I've used here and the general principles of price movement in most markets from the perspective of institutional capital, I highly recommend checking out this guide if you haven't already. 👇
P.S. This is not a prediction of the exact price direction. It is a description of high-probability setups that become valid only if specific conditions are met when the price reaches the marked POI. If the conditions are not met, the setups are invalid. No setup has a 100% success rate, so if you decide to use this trade idea, always apply a stop-loss and proper risk management. Trade smart.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
If you found this analysis helpful, support it with a Boost! 🚀
Have a question or your own view on this idea? Share it in the comments. 💬
► Follow me on TradingView for timely updates on THIS idea (entry, targets & live trade management) and not to miss my next detailed breakdown.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Note
UPDATE: GBPUSDThere is no longer enough time for the potential short setup to develop before the NY session closes ahead of the weekend. Price has entered a consolidation on the lower timeframe because of a critical piece of context that was not known in advance and precludes a safe entry.
This context is the highly unpredictable outcome of the Trump meeting in Alaska. Any surprise announcements that emerge over the weekend could cause a large gap on the Dollar Index on Monday, affecting all major pairs. Because of this, "Cable" could see a volatile, unpredictable move at Monday's open, either pushing up to break the August 14th high or gapping down significantly.
Either way, the best course of action is to wait for next week. The start of the new week will provide clarity on whether the short setup is still viable, or if the price will move sharply in one direction without offering a chance for a controlled entry.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.