Based on the clues the market is showing, I believe the pound wants to run for 1.3090 or 1.3100 this week.
Here is my reasoning.
First - In August we had tons of buying volume accumulated around that number, those longs were used to push price higher and actually SELL at a better price. So I believe institutions still have these longs open but are BEARISH on this currency. They will need to close them out before they move lower. When you close a buy position it becomes a sell. So I'm looking for sells to flood in around 1.3090-1.3100. This price is specific to them so they don't lose money.
We also have a liquidity void on the daily chart (orange) and this can add some more confirmation that price may be attracted back to the upside.
We have two swing highs that are rather obvious to spot and I'm looking for institutions to attack peoples orders sitting just above them, which would be long orders the banks can suck up.
The question for me is where can I buy at? The week is still very early, and the entry should come tomorrow during london. I think for this idea to work we need to see price stay above the blue daily support zone I have drawn. This is a level they kept reversing off rapidly last week and attacking peoples trailing stops who were long.
I'll look to buy in the blue, and ride to the green and orange areas.
Let's see how this develops.
Here is my reasoning.
First - In August we had tons of buying volume accumulated around that number, those longs were used to push price higher and actually SELL at a better price. So I believe institutions still have these longs open but are BEARISH on this currency. They will need to close them out before they move lower. When you close a buy position it becomes a sell. So I'm looking for sells to flood in around 1.3090-1.3100. This price is specific to them so they don't lose money.
We also have a liquidity void on the daily chart (orange) and this can add some more confirmation that price may be attracted back to the upside.
We have two swing highs that are rather obvious to spot and I'm looking for institutions to attack peoples orders sitting just above them, which would be long orders the banks can suck up.
The question for me is where can I buy at? The week is still very early, and the entry should come tomorrow during london. I think for this idea to work we need to see price stay above the blue daily support zone I have drawn. This is a level they kept reversing off rapidly last week and attacking peoples trailing stops who were long.
I'll look to buy in the blue, and ride to the green and orange areas.
Let's see how this develops.