technical analysis gbp

7/28/2019 Technical Analysis GBP

1/3

Technical Analysis Report

GBP/USD

2 years high = 1.6745

2 years low = 1.5233

Daily Chart Analysis (Past 2 years analysis)

The average market daily movement in GBP/USD is around 135 pips. Past 3 month data shows that

average movement in market is around 85 pips.

Whenever market is in BULLISH trend, its normal up-trend appetite is around 800-850 pips and if this

level is broken then it makes a high of around 1050-1100 pips. Whenever market is in BEARISH trend

its normal downtrend appetite is around 750 to 850 pips and if this level is breached and marketmake a low of nearly 1000 to 1120 pips. Whereas in SIDEWAYS market ranges from 500 to 550 pips

on upside while 500 to 550 pips on down side.

Relative Strength Index (RSI) of the market, when market is in uptrend, has touched 60.5-61.5 level

several times (approx 8 time) so it is a strong level of market RSI and if this level is breached then

second strongest level of RSI is 70-70.5 which it has touched 4 times, whereas market RSI reached 80

only one time in past 2 year. RSI of the market, when market is in downtrend, has touched 36-37

level approx. 5 times so it is the strong level whereas RSI has also achieved 32.5-33.5 level 4 times.

Market RSI has dropped 3 times below the level of 30 maintaining the level of 19.7,18 and 27. Jan

and Feb 2013 data shows that, normally when market moves 10-15 pips there is a change of 1 RSI. As

per the calculation of correlation (2013 data only) between Change in market and Change in RSI, the

result is 0.97. So we can interpret that the relation between the two variables is perfectly correlated.

As far as moving average (SMA) is concerned, past study shows that market test its SMA5 nearly

every day. The probabilities that it will test SMA5 in how many days are 1st

day 64%, 2nd

day 16%, 3rd

day 13%, 4th

day 5% and 5th

day 2%. One of the key finding is that whenever SMA are crossing each

other or fake out market touch its 5,10 and 15 days SMA frequently. Sometime SMAs give fake cross

over effect and sometime it merge up or contracted which at a first glance seems like market is

changing its trend but suddenly it enters in to its previous (same) trend. This fake out and contractionscheme doesnt last more than 2to4 days or we can say that fake cross out burst up when SMA5 and

SMA10 creates a distance of approximately 25-30pips. In past 2 years market has made 12 crossovers

(except fake crossovers and sideways crossover). Bullish and Bearish crossover indication is that

there is a sharp change in the direction of SMA5 whereas SMA10 takes 3to4 days after SMA5 and in

this period SMA5 cross SMA10 and SMA15 takes nearly 6to8 days to change its direction.


2/3

Bollinger Band basically shows the volatility of GBP/USD market. If the upper or lower band distance

is increasing from the middle band then it shows the high volatility of market. When bands are

making around 250 pips distance then we can say that market has a room for further growth or

decline in each bullish and bearish trend. Whenever market breaches its middle Bollinger band it

enters in to new successful trend except when it is giving an impact of fake out. Normally fake outeffect doest not last longer (maximum 5 days). Sometimes market break its Bollinger resistance or

support but Bollinger push the market back within its limits with in a day or two. Market makes

nearly 35 to 60 pips on average outside its bands.

Hourly Chart Analysis

Past 50 hourly candles show that market average hourly appetite is 20 pips.

Whenever market is in uptrend its normal RSI priority is approximately 61 to 62.5 and if this level isbreached then its second target is to reach the level of 65 to 66 and the maximum RSI that we can

observe is around 77. However in downtrend RSI first priority is to 39 to 40 whereas if this level is

breached market plays at an RSI of 29 to 30 and minimum RSI target on downside is 19 to 20.

Moving Avg. Market Test

SMA5 1st hour 66% 2nd hour 18% 3rd hour 5% 4th hour 10% 5th or more hour 1%

SMA10 1st

hour 53% 2nd

-4th

hour 28% 5th

-8th

hour 11% 9th

-11th

hour 5% 12th

-onwards 3%

SMA 15 1st

hour 47% 2nd

-4th

hour 26% 5th

-8th

hour 9% 9th

-14th

hour 8% 15th

-onward 10%

Market has made 9 successful crossovers.

40-80 pips distance between the Bollinger bands mean market has further opportunity in that trend.

If market breaks the Bollinger resistance or support that Bollinger throw back market within 2 hours

normally.

4- Hourly Chart Analysis

Past 50 candles show that market average 4-hourly appetite is 31 pips.

Whenever market is in uptrend its normal RSI priority is approximately 65-66 and if this level is

breached then its second target is to reach the level of 69-71 and the maximum RSI that we can

observe is around 77.5 to 80. However in downtrend RSI first priority is to 31 to 32 whereas if this

level is breached market plays at an RSI of 26 to 27 and minimum RSI target on downside is 19 and

16.


3/3

Moving Avg. Market Test

SMA5 1st

candle 67% 2nd

candle 13% 3rd

candle 8% 4th

candle 6% 5th

or more 5%

SMA10 1st

candle 56% 2nd

-4th

candle 27% 5th

-8th

candle 11% 9th

-11th

candle 3% 12th

-onwards 3%

SMA 15 1st candle 44% 2nd-4th 29% 5th-8th 8% 9th-14th 6% 15th-onward 13%

45-70 pips distance between the Bollinger bands mean market has further opportunity in that trend.

If market breaks the Bollinger resistance or support that Bollinger throw back market within 2 to 3

candles normally.

technical analysis gbp

Documents