Market Structure
The GBP/USD H1 chart shows a clear shift in market structure:
- After a strong bullish leg in mid-August, price failed to create a new higher high and started forming lower highs and lower lows – signaling a potential bearish reversal.
- The most recent impulsive drop suggests that smart money is in sell-side control.
Liquidity & Key Levels
- Buy-Side Liquidity: 1.3530 – 1.3550 (equal highs) → potential stop hunt zone before reversal.
- Sell-Side Liquidity: 1.3400 – 1.3380 (recent lows) → likely target for price to sweep liquidity.
Premium & Discount Zones
Using Fibonacci from the latest swing high to swing low:
- Price is currently trading in the premium zone, which is favorable for smart money to accumulate short positions.
- As long as price stays below 1.3550, the bias remains bearish.
Next Probable Targets
Primary Scenario (Bearish Bias):
- Price may sweep liquidity above 1.3530 → rejection from premium zone → drop towards 1.3400.
- If momentum continues, extension towards 1.3300 (major demand zone) is possible.
Alternative Scenario (Bullish Breakout):
- A clean break & close above 1.3550 would invalidate the bearish setup and open the way for 1.3620 – 1.3650 liquidity sweep.
Smart Money Take
This setup aligns with Smart Money Concepts:
- Liquidity grab → Market structure shift → Optimal trade entry → Target sell-side liquidity.
Traders should wait for confirmation (e.g., lower-timeframe BOS / FVG entry) before executing shorts for maximum precision.