The GBPCAD 4-hour chart aligns with our previously identified bearish bias. The market is currently retracing into a Fair Value Gap (FVG) in a premium zone, providing a high-probability area for short entries. Here’s the updated breakdown:
Fair Value Gap (FVG) in Premium Zone The price has retraced into a Daily Fair Value Gap (FVG), highlighted in red, which aligns with the premium zone of the recent swing. This zone represents a potential area where smart money could enter short positions after mitigating imbalances.
Bearish Bias The bearish bias remains intact as the price is approaching an area of interest for a reversal. A rejection from this FVG zone could lead to further downside, targeting liquidity below previous swing lows.
Key Targets First Target: 1.7520 — This is the nearest significant low that aligns with liquidity resting below. Second Target: 1.7420 — A deeper liquidity pool where price is expected to gravitate.
Execution Plan Entry: Look for short positions within the FVG zone (1.7720 - 1.7790) after confirmation through lower time-frame bearish signals (e.g., CHOCH, BMS). Stop Loss: Place stops above the FVG zone, around 1.7820, to protect against further retracements. Take Profit: First Target: 1.7520 Second Target: 1.7420 Extended Target (if momentum continues): Below 1.7300
Confluence for Short Setup FVG Mitigation: Price is retracing into a clear imbalance in a premium zone. CHOCH: The bearish structure shift supports the continuation of the downtrend. Liquidity Targets: Sell-side liquidity exists below the recent lows, acting as magnets for price. Trend Continuation: The overall market is aligned with the bearish trend on higher time frames. Summary The GBPCAD 4-hour chart presents a high-probability bearish setup as price retraces into the FVG zone. A rejection here, supported by lower time-frame confirmations, aligns with the overall bearish trend and provides a favorable risk-to-reward opportunity. Targets are set at 1.7520, 1.7420, and potentially lower.