GBPUSD analysis amid dollar weakness

Forex trading

GBPUSD analysis, The British pound has stayed supported by the passage of post-Brexit trade deal in the UK Parliament. This together with the prevalent bearish sentiment surrounding the US dollar and the Dollar Index, allowed the GBPUSD pair to create brand new demand imbalances and build on its bullish momentum eliminating weak supply levels. GBPUSD analysis is clearly bullish with new demand levels being created as its builds a bullish momentum.

Let’s say there is a double correlation between GBPUSD analysis and dollar weakness that is helping GBPUSD major cross pair to keep on rallying and respecting demand imbalances created on the daily timeframe like the one you can see in GBPUSD analysis below.

How to trade Forex using supply and demand imbalances

There was a very strong imbalance created around 1.329 in the middle of December 2020. It was last 21st December that GBPUSD pulled back to that strong imbalance. There is a lot of room for GBPUSD to reach the daily supply overhead that can be seen in the chart below. There are new levels of demand being created in smaller timeframes if you are a forex intraday Forex trader. You might have been tempted to go long after the imbalance was created, if you went long using smaller timeframes, your entry would have been a loss because once there is a strong imbalance like the one shown below, chances are that GBPUSD is pulling back to the origin of the move. And that’s exactly what has happened. The British Pound has been getting very strong in the last months and this can be seen in the creation of similar demand levels on other British Pound cross pairs.

How can you trade Forex and most precisely GBPUSD major cross pair? Well, there are many Forex trading strategies. Using supply and demand imbalances is just one of many. Once a strong bullish impulse is seen on a price actions, chances are that price will pull back to the it. There are times that it will not retrace as expected but there is nothing we can do about it and supply and demand traders.

GBPUSD forex major forecast January 2021
GBPUSD forex major forecast January 2021

If you want to learn how to trade Forex using supply and demand imbalances, you are welcome to join us at Set and Forget trading community

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