A Battle Station alert has just come in – notifying us about a reversal candle on the GBPUSD 4 hour chart as the last 4 hour candle just closed.
Doing our top down analysis by checking in with the daily chart, we can see it also looks very bearish which aligns well with the situation on the 4 hour time frame. The H4 chart has a nice bearish trending structure to it right now – the classic ‘lower highs and lower lows’ are being printed with the downward momentum.
So we’re obviously looking to sell, and sell ‘in position’ by targeting reversal patterns that form at the next lower highs as the market corrects and terminates.
The battle station picked up a bearish reversal candlestick pattern for us, which completes the puzzle here and gives us a frame work to build a short position from.
If this reversal candle plays out, and the downward momentum continues – then we are likely to see a move back down to the recent major lows.
Trade Failed But Leaves Behind Potential Bullish Breakout
Unfortunately the bearish trade didn’t work out. The bullish price action came in strong quickly after and knocked out the stop loss for this setup.
In the wake of the failed trade, a potential bullish breakout setup has formed as the market prints a double inside candle setup on the h4 chart.
If we get a breakout of the highs after the London open, these double inside days could be the catalyst for a breakout that fuels the next push higher.