GBPUSD Analysis 17 Nov 2020

I started my analysis by looking at the GBPUSD M30 chart.

GBPUSD M30

GBPUSD M30

Notice that price was unable to go above the general level as shown in the chart, with selling coming in each time to bring prices down slightly. There was no strong buying or strong selling though.

I do note, however, that the selling waves have higher volume than the buying waves, but the prices go nowhere. Effort vs Result here?

Let's switch to a higher timeframe for better clarity.

GBPUSD H1

GBPUSD H1

The GBPUSD H1 chart doesn't offer any clearer insights, with the battle between the buyers and sellers undecided.

Time to look at H4.

GBPUSD H4

GBPUSD H4

Here we note that there was a previous top, which the H4 chart made very easy to see. When there is a top like this, prices sometimes go back to re-test it.

  • So, we need to keep this in mind: is price going back to test this top?

Unsure

Next, note that the up waves have more volume than the down waves in the second-last swing up. But, in the current up leg, we have 963 volume which is double the previous up wave's volume (415). At this point we are still unable to break the previous swing high.

This doesn't mean Effort vs Result yet, because we still don't know if price will go ahead to break the previous swing high. So, we need to wait to see:

  1. If price turns back to go down, then we may have a case of Effort vs Result. If the volume of the down wave is strong, then we may be looking for Shorts.
  2. If price breaks above the previous swing high, we wait to see if the pullback down wave's volume is strong. If strong, we stay out and wait further. If weak, we can consider taking a Long when the down wave ends.

At this point we are still not sure where price will go, so we have to wait til price commits itself by way of strong volume in a wave, and weaker volume in a pullback.

So we stay out for now.

Update

GBPUSD H4

Price headed upwards, proving that previously, the heavy buying volume is not just Effort vs Result. I didn't enter a trade because price didn't pull back enough for me to enter, before reaching close to the last high.

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