Will Buyers Push GBP/USD Past the 1.425 Levels?
Let’s break down GBPUSD from a top down perspective.
Starting with the Monthly time frame, by first glance you may think that sellers are way in control.
If we zoom in to more current price action, we can see price has had a hard time breaching this psychological 1.425 price level since April 2018.
If we look a little closer we can see that monthly price action is creating HIGHER LOWS and the previous structure was broken.
This gives us a great overall picture on what we can expect current price to do and gives us a solid foundation once we go deeper in our top down analysis to lower time frames.
Once we drop down to the weekly TF, We can see some similar price action where HIGHER LOWS are continuously forming. This lets us know that buyers are in control of overall market sentiment for this instrument.
We also see price struggle to break through the last HL at the 1.367 level, and create a new HL which can now be considered our weekly support.
Dropping down to the Daily TF we see that sellers gained control for about a month and a great sell opportunity was presented around July 12, 2021 where price bounced perfectly off of the 61.8 and dropped flawlessly to the -27 fib extension.
Based on that Price Action we see price forming Lower Highs and price looks like it wants to break that structure if we get a daily close above the previous structure level.
We can see buyers start to take control after bouncing off of the weekly support at 1.367 and forming a strong bullish engulfing
On the H4 timeframe, we can see buyers in control forming new higher lows and higher highs. Our previous daily structure now becomes our H4 Support at psychological level 1.3900. If we look left, we can see 1.400 level as a strong resistance point for price to react to.
At this point we have to be patient and wait for the market to show its hand. We know that based on price action we should want to go with the flow and direction of the market and look for buy positions (The trend is your friend). We can wait for a reaction off of the H4 Resistance at 1.400 and look for buy positions around H4 Support at 1.3900. OR see if price breaks through and closes above H4 resistance and look for buy positions at the new found support.