Good morning traders, I hope you're all doing well and are actively participating in the markets. Into the markets today I'm looking at GBPUSD where price broke a key H1 & H4 demand zone at 1.26560 & 1.26100 which was the origin of the previous rally to the major H1 & H4 supply zone at 1.27900 & 1.28450. Price filled the major H4 range from the key H1 & H4 demand zone to the major H1 & H4 supply zone and back to the key H1 & H4 demand zone. Price broke the key H1 & H4 demand zone and formed lower lows at 1.25300 then retraced back to retest the broken demand as new supply before a potential continuation of the drop lower. Price rallied back to the zone at 1.26100 and formed a rejection with candle closes below supply showing a potential bearish reversal. I anticipate a strong drop from this zone for a potential continuation of the prevailing bearish trend and my target is at 1.25000.
Price gained more bullish momentum during London session and rallied deeper into the zone at 1.26331 and formed a strong H4 bullish engulfing with candle closes inside the zone. I anticipate a potential rally to 1.26580 but will be watching out for candle closes inside the zone and no break of the zone to determine the validity of the bearish reversal setup. Price rallied deeper into the H1 & H4 supply zone during London session into NY session where markets formed a strong liquidity grab to 1.26900 with a fake breakout on H1 then formed a strong rejection wick on H4 with candle close inside the zone. Price gained strong bearish momentum during NY session after the CPI news release where price dropped by a strong drop away from supply in one large H4 bearish engulfing candle. Price dropped to 1.25800 which is the previous H4 low then retraced during Asian session. I anticipate a retest of the H1 & H4 supply zone at 1.26100 before a potential continuation of the drop lower to the previously mentioned target.
Price retraced to retest the H1 & H4 supply zone at 1.26100 during London session then formed a strong rejection with candle closes below supply followed by a strong drop by a constant push away from supply. Price gained strong bearish momentum, forming lower lows dropping 120 pips to 1.25400 confirming the continuation of the bearish sentiment. I anticipate a continuation of the drop to the previously mentioned target at 1.25000.
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