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This is a (very) long-term chart of GBPUSD on a multi-decade long basis on the 1M time-frame, as I want to make a clear case why, despite of December’s rise, the pair will remain a ‘sell’ during the majority at least of 2022.<\/p>\n
I’ve plotted the Sine Waves to illustrate the sense of long-term Cycles on this pair. As you see, for the past 20 years at least (since 2000), the Sine Waves manage to fairly accurate display the multi-year cyclical effect. Bottoms (green arrows) and tops (red arrows) happen to be very close to where the Cycles suggest.<\/p>\n
An indicator that greatly compliments this approach is the CCI. As shown, when the price is close to the Sine Wave low and the 1M CCI is below -100.00, then GBPUSD is at or very close to its Cyclical Bottom (green arrows). Similarly, when the price is close to the Sine Wave high and the 1M CCI is above +100.00, then the pair is at or close to its Cyclical Top (red arrows).<\/p>\n
Right now, the CCI is exactly on the CCI middle (0.00) having previous been above +100.00, thus pricing the Cyclical Top (Feb – May 2021). Based on this strategy, the Bottom isn’t yet in for this phase of the Cycle, thus my bearish outlook for 2022. The next Cyclical (long-term) buy opportunity should emerge in 2023 once the CCI breaks again below -100.00.<\/p>\n
Tradingview\u00a0 link:<\/p>\n