GBPUSD Targets Inefficiency

Market Analysis – December 2

The GBPUSD  market has firmly broken below the 1.26200 key level. After this break, the price retraced above the breached zone and is now approaching a significant fair value gap, signaling a potential reaction area.

GBPUSD Key Levels

Demand Levels: 1.26200, 1.23330, 1.21000
Supply Levels: 1.28340, 1.30420, 1.34140

GBPUSD Long-Term Trend: Bearish

The swift move to the 1.26200 demand level has created an inefficiently traded zone, visible in the fair value gap above the key level. This rapid price action underscores a strong bearish trend, supported by the ADX (Average Directional Index) surpassing 40, indicating solid bearish momentum.

Currently, the price is moving upward and has reclaimed the 1.26200 level, aiming for the fair value gap, which coincides with a bearish order block.

GBPUSD Short-Term Trend: Bullish

In the short term, a bullish market structure has formed. However, on higher timeframes, there has only been one break of structure to the upside, leaving room for further confirmation. A second break of structure could indicate a potential shift from a pullback to a full trend reversal.
While short-term momentum points to a bullish bias, the overarching bearish trend remains dominant unless a sustained bullish move confirms a reversal. Traders should watch for price reactions within the fair value gap and observe how the market interacts with the bearish order block for clearer direction, including potential forex signals that may align with these movements.

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