The British pound is currently moving towards the upside, showing a gradual but steady climb. However, it is approaching a significant resistance area that could pose a challenge to further gains.
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Double top
This resistance zone was previously a strong support level before the market formed a double top pattern and subsequently broke below it. As is often the case in technical analysis, this former support has now flipped into resistance, making it a key area where price could face strong selling pressure and potential rejection.
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1h FVG
Adding to the confluence, this resistance zone aligns closely with a 1h Fair Value Gap (FVG). FVGs often attract price back into them before a reaction occurs, making this area even more significant for a potential reversal.
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Golden Pocket
Just below the FVG lies the "Golden Pocket", the 61.8% Fibonacci retracement level from the most recent drawdown. The Golden Pocket is one of the most closely watched Fibonacci levels by traders and is known for its strong influence on price action. Its proximity to the current structure increases the likelihood of a notable reaction, as many market participants will be watching this area closely for signs of rejection.
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Conclusion
Overall, the combination of previous support-turned-resistance, the 1-hour FVG, and the Golden Pocket retracement forms a high-probability zone where the British pound could encounter heavy resistance and a potential downside move.
-------------------------------
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-------------------------------
Double top
This resistance zone was previously a strong support level before the market formed a double top pattern and subsequently broke below it. As is often the case in technical analysis, this former support has now flipped into resistance, making it a key area where price could face strong selling pressure and potential rejection.
-------------------------------
1h FVG
Adding to the confluence, this resistance zone aligns closely with a 1h Fair Value Gap (FVG). FVGs often attract price back into them before a reaction occurs, making this area even more significant for a potential reversal.
-------------------------------
Golden Pocket
Just below the FVG lies the "Golden Pocket", the 61.8% Fibonacci retracement level from the most recent drawdown. The Golden Pocket is one of the most closely watched Fibonacci levels by traders and is known for its strong influence on price action. Its proximity to the current structure increases the likelihood of a notable reaction, as many market participants will be watching this area closely for signs of rejection.
-------------------------------
Conclusion
Overall, the combination of previous support-turned-resistance, the 1-hour FVG, and the Golden Pocket retracement forms a high-probability zone where the British pound could encounter heavy resistance and a potential downside move.
-------------------------------
Thanks for your support.
- Make sure to follow me so you don't miss out on the next analysis!
- Drop a like and leave a comment!
Trade closed: stop reached
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Free discord trading community
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Free signals
t.me/codeandcandle
discord.gg/ctYsFQR4bx
Free signals
t.me/codeandcandle
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.