Weekly Forex Forecast for GBPUSD, GBPCHF, GBPJPY, XAUUSD (31-05 February 2021)
Hey everyone! Welcome to this week's forex forecast for the week ending February 5th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at GBPUSD, GBPCHF, GBPJPY & XAUUSD.
Looking at the overall trend in this market, we've got the long-term ascending channel, where price has been steadily increasing forming HH's and HL's for almost a year now, ever since the initial Covid-19 drop back in March 2020. Zooming in closer on the H4 timeframe, we've got the rising wedge pattern formed, and price is now reaching the apex point signifying a breakout coming up. In confluence with this, we've also got a strong Bullish OB held at 1.348 which is also attracting price to head downwards to collect trade orders before potentially bouncing off the channel's bottom and rising once again.
Overall we've got a choppy market here, consolidating between the 1.22 and 1.16 zones. I think it's about ready to break out now, as many confluences are lining up to suggest so. Firstly we've got the large Liquidity Pool (LP) area formed on the Weekly TF, attracting price towards this zone. Secondly, the resistance level at 1.22 is where most retailers would be selling, as it's seen as strong resistance and unlikely to break above. However, with all the liquidity above, banks are likely to push price higher to hit sellers stop-losses.
Overall, we've got the ascending channel formed just like on GBPUSD where price has been steadily increasing after the initial crash caused by Covid-19. We've got the rising wedge pattern showing on the short-term time frames, and a substantially large bearish OB formed shown on the Weekly TF. We've also got retailers seeing resistance at 142.5, so most are likely to be selling at the moment. Price is moving exactly how I'm expecting it to, breaking above higher to catch out retailers and take out their stop losses, collecting orders from the OB displayed and now I'm expecting a huge downfall on this pair up to the channel's bottom.
Overall, I have been pointing out this bullish flag pattern where price fails to break above the channel's top to complete the pattern. I expect a short-term bearish move to collect orders at the Daily Bullish OB displayed in the chart shown by the curved arrow. Price should be collecting orders at this level before making a reversal and completing the flag pattern on this pair. I find it unlikely that price will reverse at the H4 Bull-OB displayed on the chart because it's seen a retailer's support however it is possible, so it's essential to look out for price action confirmations before taking any positions.
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