GBPUSD (CABLE) MARKET ANALYSIS

 Good morning traders, as we get into the new week I hope you're all ready to tackle it and get new opportunities in the financial markets. Into the charts, I'm looking at GBPUSD where price rallied to a key H1 & H4 supply zone at 1.14680 & 1.13831 which is the origin of the major drop to the H4 & daily demand zone at 1.05338 & 1.03980 and also the previous drop to the H4 low at 1.09508. Price filled the major range from supply to demand and back to supply and also the minor range from supply to the H4 low at 1.09508 and back to supply. Price rallied into supply, formed a rejection wick and candle close below supply followed by a H4 bearish engulfing candle showing possible reversal at the zone. Took sell entries during London session at 1.13575 with SL at 1.14100. Setup taken is a rally base drop, a reversal setup and my target is at the H4 low of 1.09508.

Price failed to break the H1 low at 1.12700 and instead gained strong bullish momentum and rallied to the next H4 supply level at 1.14810 & 1.14291 hence having to close out my short positions as price rallied higher. This strong bullish rally happened as a result of a strong collapse of the dollar index (DXY) showing dollar weakness hence causing a strong rally in GBPUSD and other XXXUSD pairs. Price rallied into supply, faked out a reversal but candle closed inside supply followed by a strong rally breaking supply and forming new highs on H1 7 H4 at 1.16320 confirming a shift in market structure to bullish.