At the moment GBPUSD is currently pushing lower from the July 2023 high. Looking at the 4 hour chart below we could expect for the pair to continue pushing lower towards the demand zone (pink), but before a move lower watch for selling opportunities in the supply zone (grey) for the pair to find more possible sellers and grab liquidity. Waiting to sell in the supply zone (grey) 1.2754-1.2819 area with stops above 1.2819 and targeting the demand zone (pink) 1.2555-1.2486 area will offer a good risk to reward trade setup.Traders should also switch to the smaller time frames to refine the entry with tighter stops but making sure the refined sell entry remains in the supply zone (grey) of the 4 hour chart. Switching down to the smaller time frames will give the trade a even better risk to reward ratio.
Other possible trade setups will be if price pushes lower to the demand zone (pink) then watch for possible buying opportunities against 1.2486 stops. If price does not push lower to demand zone and extends higher above the supply zone (grey) then expect a rally higher to the next supply zone (light blue) where sellers will be waiting to push the pair lower. Only time will tell what GBPUSD will do but for now you know the zones to look for possible trade setups.
GBPUSD 4 Hour Chart August 15 2023
Of course, like any strategy/technique, there will be times when the strategy/technique fails so proper money/risk management should always be used on every trade. Hope you enjoyed this article and follow me on social media for updates and questions> @AidanFX
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