GBPUSD Remains Bearish Stance After Judas Swing

Market Analysis – May 7

GBPUSD daily chart featured a Judas swing pattern that emerged in March, marking a notable market development. Preceding this, the market underwent a period of consolidation spanning from November to February. However, in a deceptive turn of events, the price broke out to the upside of this range, creating false Forex signals for speculators. This false breakout was orchestrated to capitalize on traders’ losses, reflecting a strategic maneuver by market participants. Notably, the Stochastic indicator indicated an overbought market condition coinciding with the false bullish breakout to establish a bearish reversal.

GBPUSD Major Levels

Demand Levels: 1.2300, 1.2120, 1.1830
Supply Levels: 1.2710, 1.2860, 1.3140

GBPUSD Long-Term Trend: Bearish

In March, GBPUSD exhibited a Judas swing pattern on the daily chart, following a period of consolidation from November to February. The breakout during this phase created false signals in the forex market, strategically engineered to capitalize on speculative trading. Notably, the Stochastic indicator indicated an overbought market during the false bullish breakout, eventually reverting to the original bearish trajectory characterized by lower highs and lows.

A symmetrical triangle pattern has since materialized on the daily chart. Despite the current upward movement in price, it’s essential to recognize that this constitutes a counter-trend action. The recent ascent is attributed to the support derived from the third test on the bullish trendline. However, it’s worth noting that the price has entered the bearish order block, situated within the premium range of the bearish swing. Anticipation of a bearish reversal is heightened as the Stochastic indicator currently resides in the overbought region.

GBPUSD Short-Term Trend: Bullish

While the short-term trend exhibits a bullish bias, exercising patience for alignment between lower and upper time frame directions is advisable to avoid trading against the prevailing market sentiment. There’s an expectation for the price to revisit the low of 1.2300 upon the resumption of the bearish trend.

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