I am giving you this possible nice scenario on the GBP/USD . After a strong movement up in the past 2-3 weeks , the pair broke a weekly , which now turned in to a weekly . First of I want to start with an interesting observation on the Weekly time frame, which I will post as a picture on Twitter. We can see there that the pair made a huge downtrend which started back in July 2014. We can see that the pair made Wave 1, after which it made a correction during May and July in 2015, after which Wave 3 of the downtrend occurred and a new correction as Wave 4 formed in the beginning of 2016. The correction ended at the previous bottom Wave 1 made, as it should, and Wave 5 happened with strong movements down. For those of you who are familiar with the Wave Theory, you know that usually Wave 5, especially its’ last phase is sort of “Panic phase” when traders that are entering very late push the price down with huge movements. This is what we can observe October 2016. After that a follow up as usual after the 5-wave cycle, we had a formation and now we broke that formation with a strong move up. Now back to the 4-Hour chart where we can see that after the NFP results on Friday the pair retraced back to the Weekly , which was broken and now turned in to a Support. If the analysis regarding the Wave pattern are correct, I expect the pair to start moving up from that point – so we will most likely see a new H4 uptrend this week. If the Weekly is broken I have added a Sell Zone, just in case I am wrong about the Wave pattern. Below you can find information regarding the Buy and Sell zones, and as usual I will update the idea here and post Live Signals on our Twitter page.
Don’t forget that we are still following our plans on the EUR/CAD and GBP/JPY which I posted 2 weeks ago.
Buy Zone 1: 1.3055 – 1.3250
Buy Zone 2: 1.3270 – 1.3420
Sell zone: 1.2985 – 1.2830
I wish everyone a profitable week and follow us on Twitter for Live Signals on our plans.
More statistical information regarding our trades and the ones I post as Live Signals, you can find on our Blog. :)