Detailed Analysis of GBP/JPY (1H) Chart
1. Harmonic Patterns (Likely Bat or Gartley)
The marked points labeled "A", "B", "C", and "D" form a harmonic pattern. Harmonic patterns use Fibonacci retracement levels, often aiming for precision with levels like 0.618, 0.786, and 1.618.
The Fibonacci retracement values are visible on the chart (e.g., 0.618 and 0.786), indicating key levels where price is expected to react.
2. Elliott Wave Count
The chart shows a likely Elliott Wave count, where the current structure is labeled with Roman numerals (I, II, III).
Wave III has an extension, typically a strong impulse wave, often exceeding the 1.618 level.
The labeling around these waves helps identify potential entry or exit points based on the wave completion and correction expectation.
3. Fibonacci Extensions and Retracements
The levels labeled 1.618, 1.786, and 2.000 are common Fibonacci extension levels used to project possible reversal points.
The "CONFIRMATION" level at 1.618 suggests that if price reaches this, it aligns with a wave target, while the "INDUCEMENT" level at 1.786 might serve as a stop-loss area or profit target.
These levels indicate areas of confluence where traders expect significant support or resistance.
4. Volume Profile and Inducement Levels
There’s a volume profile along the left side of the pattern, giving insights into where most trading volume occurred during the price movements.
"Inducement Wave 3" suggests a likely resistance zone that could trap traders or lead to a reversal.
5. Zones of Confluence
The shaded red and green zones highlight areas of high confluence, where multiple technical factors align, often strong areas for potential reversals or breakout setups.
For example, the zones above Wave III are potential resistance levels, aligned with key Fibonacci extensions.
6. Trade Setup Labels
Labels like "LONG 2 SHORT 4" and "SHARP 2 SHALLOW 4" indicate potential entry points or setups. They suggest specific plays based on wave structure, where "LONG" and "SHORT" relate to anticipated corrective patterns.
7. Invalidation and Risk Management
"INVALIDATION WAVE 0" shows a critical level where the trade idea or wave count would be invalidated if price breaches it, an essential risk management tool.
Key Takeaways
This chart combines harmonic patterns, Elliott Wave, Fibonacci levels, and volume analysis, aiming for high-probability trade setups.
Focus on high-confluence zones like 1.618-2.000 Fibonacci extensions for entries/exits.
Manage risk by setting invalidation points and noting potential inducement areas to prevent getting trapped.
The marked points labeled "A", "B", "C", and "D" form a harmonic pattern. Harmonic patterns use Fibonacci retracement levels, often aiming for precision with levels like 0.618, 0.786, and 1.618.
The Fibonacci retracement values are visible on the chart (e.g., 0.618 and 0.786), indicating key levels where price is expected to react.
2. Elliott Wave Count
The chart shows a likely Elliott Wave count, where the current structure is labeled with Roman numerals (I, II, III).
Wave III has an extension, typically a strong impulse wave, often exceeding the 1.618 level.
The labeling around these waves helps identify potential entry or exit points based on the wave completion and correction expectation.
3. Fibonacci Extensions and Retracements
The levels labeled 1.618, 1.786, and 2.000 are common Fibonacci extension levels used to project possible reversal points.
The "CONFIRMATION" level at 1.618 suggests that if price reaches this, it aligns with a wave target, while the "INDUCEMENT" level at 1.786 might serve as a stop-loss area or profit target.
These levels indicate areas of confluence where traders expect significant support or resistance.
4. Volume Profile and Inducement Levels
There’s a volume profile along the left side of the pattern, giving insights into where most trading volume occurred during the price movements.
"Inducement Wave 3" suggests a likely resistance zone that could trap traders or lead to a reversal.
5. Zones of Confluence
The shaded red and green zones highlight areas of high confluence, where multiple technical factors align, often strong areas for potential reversals or breakout setups.
For example, the zones above Wave III are potential resistance levels, aligned with key Fibonacci extensions.
6. Trade Setup Labels
Labels like "LONG 2 SHORT 4" and "SHARP 2 SHALLOW 4" indicate potential entry points or setups. They suggest specific plays based on wave structure, where "LONG" and "SHORT" relate to anticipated corrective patterns.
7. Invalidation and Risk Management
"INVALIDATION WAVE 0" shows a critical level where the trade idea or wave count would be invalidated if price breaches it, an essential risk management tool.
Key Takeaways
This chart combines harmonic patterns, Elliott Wave, Fibonacci levels, and volume analysis, aiming for high-probability trade setups.
Focus on high-confluence zones like 1.618-2.000 Fibonacci extensions for entries/exits.
Manage risk by setting invalidation points and noting potential inducement areas to prevent getting trapped.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.