Major USD Pairs Discussion | Daily Market Breakdown

On the Weekly, GBPUSD has formed a bearish consolidation channel and traded to the upper boundaries of the channel this week, before retreating for a closing price at 1.3452 below it.

On the Daily, GBPUSD has formed a bearish harami pattern a type of bearish reversal double Candlestick pattern, where the Parent candle is a big bullish momentum candle followed by a baby candle (bearish) closing below 50% of the parent candle. This pattern often indicates take profit by institutions after the bullish distribution before repricing for sells.

Still on the D1, this same Candlestick pattern (Bearish harami Pattern) formed January ending this year, and that was the beginning of the current bearish consolidation phase of GBPUSD.
Repeating it again as a 3rd touch of the bearish trendline can cause significant sells down to 1.3301 H-support levels, which I'll be anticipating next week.

On the 4hrs, there's a bullish channel price needs to invalidate before the sells will be fully confirmed. Once the 4hr dynamic support is invalidated, I'll expect the retest of it to drive price downwards to the 1.3301 price region to form the right shoulder of the Inverted head and shoulder pattern.

GBPUSD- I'll be looking for buys next week at the 1.3301 price level. But I'll also be ready for the Sells if it looks more promising than the buys.

GBPUSD Trade projection

Bias: Intraday Sells
Timeframe: 1hr
Primary Structure: Potential Bullish BARR Top Pattern (Bump and Run Reversal Pattern)

To catch the potential sells on GBPUSD next week, I'll use the BARR pattern Strategy as my primary analysis. Then confluence it with other technical patterns.

Trading GBPUSD using the BARR Pattern Strategy on 1hr (1)

The BARR pattern (Bump And Run Reversal) is a powerful trend reversal chart pattern that often shows a transition from aggressive buying to exhaustion(profit-taking) and then a bearish reversal (in this case, the 1hr bullish trend on GBPUSD).

From the Charts we can see a Diverging Ascending Channel. This is often the classical footprint of the BARR Top pattern

Trading GBPUSD using the BARR Strategy on 1hr (2)

The BARR Pattern is of two types. The Bearish BARR Top and The Bullish BARR bottom. But the bearish BARR Top is the most popular version.

The Bearish BARR Top is the Bullish trend reversal version, while The Bullish BARR bottom is the Bearish trend reversal version (that means after a long bearish trend, and a BARR Bottom appears, then a bullish trend will follow.)

The Chart picture shows a potential BARR Top pattern, which means the pattern is still forming and has not conclude yet.

Trading GBPUSD using the BARR Strategy on 1hr (3a)

The BARR pattern has 3 phases. The Lead-In, The Bump, and the Run. The Lead-in is the accumulation phase, The Bump is the distribution phase, and The Run is the bearish reversal phase.

Phase 1- The Lead-In: From the Charts, this is the beginning part of the 1hr Trend. This phase started from last June's Ending till This July's middle.

We see several accumulation phases of the market that are structured in parallel channels. In this phase greed factor is seen, as traders begins to add more positions for buys, since price is printing uniform structures. signaling a healthy bullish trend.

Trading GBPUSD using the BARR Strategy on 1hr (3b)

Phase 2- The Bump: From the charts, we can see an abnormal bullish pressure, compared to what was happening in the Lead-in phase. Here this phase shows clearly that this is an Institutional footprint.
This Bump happened on Wednesday when US PPI news release came out. The PPI (Producer Price) Index, the counterpart to CPI (Consumer Price Index) with a softer-than-expected result causing USD to weaken.

Still within the bump phase was when the CPI news release came out, although its impact on GBPUSD is not much felt as PPI.

The point here is that the Bump phase is often an institutional footprint causing Price expansion in an abnormal manner and this is proven by the PPI news release on Wednesday.

Psychologically, because of this Bump buys, GBPUSD will attract more buyers next week, and this is where the Euphoria Factor sets in.

Traders will be expecting more rally next week on 1hr from this price region that the bump kicked in.

Trading GBPUSD using the BARR Strategy on 1hr (3c)

Phase 3- The Run

This is what makes the BARR Top strategy currently a potential, because I'm expecting the Run Phase to form Next week.

On GBPUSD chart, the Run phase has not yet formed, this is where I'll follow up on GBPUSD all through the week to give updates if the current pullback will result in the buy continuations, or it will signal a sell reversal.

Meanwhile The Run Phase on GBPUSD will look like this Gold chart where the Bump low and the dynamic support is invalidated.

Fun thought- Imagine you spotted The Classical BARR Top Pattern imprint on Gold during its Last All-time High drive, and catching those massive sells that followed, rather than joining the Euphoria of Late Buyers. Since the Last All-time Highs, Gold has been bearish since.

Trading GBPUSD using the BARR Pattern Strategy on 1hr (3d)

The PRE-RUN phase (Distribution)

This is the current phase that GBPUSD is in at when market closed on Friday.

The Distribution phase is the sequel of "The Bump" phase and the prequel of "The RUN" phase, so I'll call it "The Pre-Run" phase. This phase represents institutions taking profits and also distributing into the buying pressure from the bump phase.

While retail traders are seeing a pullback and ready to chase the move, institutions will be repricing the asset whether to continue buying, or to start selling. As a smart retail trader that has been able to identify this BARR pattern, it's best to wait and watch what happens next, rather than chase the buy move next week.

For me, this is the most important phase of the BARR pattern Strategy, and rather than waiting for the textbook study guide on how to trade the Bump and Run pattern, I'll trade the "Pre-Run" phase in confluence with the Head and Shoulder classical chart pattern along with minimum 4 technical confluences using my FIMWET principle.

AUDUSD- Market Review and Trade Analysis

Bias: Bullsih
Market Structure: Bullish Ascending Channel
Timeframe: Weekly to 1hr
AUDUSD has been trading within the confines of a healthy weekly ascending channel since April Last year. Price just created a recent weekly Low at the 0.6867 Major Support price level, which confluences with the 3rd touch of the weekly channel.

I'll be expecting a 200pips rally to the 0.7135 Resistance price level.

AUDUSD- On the Daily, there's a double bottom formation at the 0.6867 Major Support Level with the neckline situated at the 0.7267 resistance level.
I'll be expecting price to rally for an upside break above the neckline of the Chart pattern.

AUDUSD- For a rally to the neckline, I'll first wait for price to invalidate the D1 bearish consolidation channel. this will imply the bulls will face less resistance from the bears on their way up to the top.

AUDUSD- On the 4hrs, Price has built a 4hr-bullish channel which indicates the early progression of the rally and still at its formation stage.
Before the weekly trading activities closed, price reached the upper boundaries of the 4hr bullish channel before retreating with sells. I'll expect next week to start with sell pullbacks before the buy continuations.

AUDUSD- 1hr Trade Setup
Bias: Bullish
Market Structure: Rising Channel

A decent pullback down to 0.6937 price level (blue box) will offer me a good trade opportunity to go long on AUDUSD with my Sl at 0.6908 and my TP at 0.7028.

Trading GBPUSD using the BARR Pattern Strategy on 1hr (4- tbc(to be continued)

In Summary of our discussion;

The BARR pattern (Bump And Run Reversal) is a powerful trend reversal chart pattern that often shows a transition from aggressive buying or selling (expansion) to exhaustion(profit-taking) and then a bearish reversal (distribution) (in this case, the 1hr bullish trend on GBPUSD) or a bullish reversal (Accumulation).

It is of two types. The Bearish BARR Top and the Bullish BARR bottom. But the bearish BARR Top is the most popular version.

It has 3 phases. The Lead-In, The Bump, and the Run.

The Lead-in is the formation phase, The Bump is the distribution phase, and The Run is the bearish reversal phase.

The BARR pattern is confirmed to form when the dynamic support and the bump low has been invalidated, but in this case, I'll be trading the potential, that is joining the sells, on its way to take out (invalidate) the bump Low. That means I'm taking advantage of the Unconfirmed BARR Top pattern which can be otherwise called the Potential BARR Top pattern.

The Market Psychology behind the Bearish BARR Top is
Greed-Euphoria-Distribution-Breakdown-Bearish Trend. (as explained in the main body content)

The Market Psychology behind the bullish counterpart is Fear-Panic Selling-Accumulation-Breakout-Bullish Trend. (This Cycle will be fully Explained when the Bullish BARR Bottom is spotted).

More Updates to follow next week.