$GBPUSD - Next Weeks Action - 200 pip 4:1 R:R (Idea)
This relates to my idea I posted last week titled "Long Term GBPUSD - Go Long Soon" if you want to refer to that as this is a continuation of that idea.
I know the chart looks busy but hear me out. The CoT (Commitment of Traders) indicator is at the bottom which indicates the net positions of Commercials (Central Banks) and Large Speculators (Retail Traders with Large Accounts) Central banks were at there most in net shorts at the beginning of Septembers High. As the GU started it's fall, the Central Banks were taking in profits, but also slowly adding in longs for when they had pull backs. Interest rates were also fluctuating in favor of the shorts and longs just prior to the moves (I find the interest rate information on Barchart.com) The last week of September, 9/23/2020 - 9/24/2020 Interest rates dropped 36% indicating a major sell was coming. That's also when GU was at it lowest build ing up long positions for the buy, in between the 1.27700 and the 1.26700 price range.
As this became an order block any dip back down into this area would only accumulate more buys moving the market up.
And it continued until it finally broke market structure making a new high, Which means there is now a new buying opportunity that is not at the same level as before. I have drawn it out in this Order Block between 1.29730 and 1.29310. This retracement is also in between the 62% and 70.5% retracement level where you find most bullish moves from a full wave. Price should retrace to this area for a new buy for about 200 pips until it hits a disturbance/order block in market structure to the left during the fall
Which that same 100% fib level to the approximate 200 pips also happens to be the reverse 62% level for a pullback sell (this is the fib drawn from the very top when the shorts were at their highest to the lowest price point when the longs were starting to take over in Net positions). I Placed that fib there for that specific reason, due to the CoT report. Meaning the 200 pip buy to the 100% will meet the 62% retracement of the largerfib indicating a pull back sell at this level, while there's also a confluence of an order block to the left on the chart during the drop. I try to capture it all in this chart.
So now if you look at the big busy chart, I've broken it down to what I've noticed in price action and fundamentals to know what should possibly happen next.
And once it hits that level, we'll just have to observe price action along the way to see where that pullback will go to. Because I believe we will see more Bullishness out of GU until I see the CoT indicator state more shorts are on the way. But until then this is my analysis of the next move that GU will make. I hope it makes sense and if you have any questions, or any analysis that may contradict my analysis, please share in the comments.
Thanks for reading and I hope this may help you in your trading journey
I know the chart looks busy but hear me out. The CoT (Commitment of Traders) indicator is at the bottom which indicates the net positions of Commercials (Central Banks) and Large Speculators (Retail Traders with Large Accounts) Central banks were at there most in net shorts at the beginning of Septembers High. As the GU started it's fall, the Central Banks were taking in profits, but also slowly adding in longs for when they had pull backs. Interest rates were also fluctuating in favor of the shorts and longs just prior to the moves (I find the interest rate information on Barchart.com) The last week of September, 9/23/2020 - 9/24/2020 Interest rates dropped 36% indicating a major sell was coming. That's also when GU was at it lowest build ing up long positions for the buy, in between the 1.27700 and the 1.26700 price range.
As this became an order block any dip back down into this area would only accumulate more buys moving the market up.
And it continued until it finally broke market structure making a new high, Which means there is now a new buying opportunity that is not at the same level as before. I have drawn it out in this Order Block between 1.29730 and 1.29310. This retracement is also in between the 62% and 70.5% retracement level where you find most bullish moves from a full wave. Price should retrace to this area for a new buy for about 200 pips until it hits a disturbance/order block in market structure to the left during the fall
Which that same 100% fib level to the approximate 200 pips also happens to be the reverse 62% level for a pullback sell (this is the fib drawn from the very top when the shorts were at their highest to the lowest price point when the longs were starting to take over in Net positions). I Placed that fib there for that specific reason, due to the CoT report. Meaning the 200 pip buy to the 100% will meet the 62% retracement of the largerfib indicating a pull back sell at this level, while there's also a confluence of an order block to the left on the chart during the drop. I try to capture it all in this chart.
So now if you look at the big busy chart, I've broken it down to what I've noticed in price action and fundamentals to know what should possibly happen next.
And once it hits that level, we'll just have to observe price action along the way to see where that pullback will go to. Because I believe we will see more Bullishness out of GU until I see the CoT indicator state more shorts are on the way. But until then this is my analysis of the next move that GU will make. I hope it makes sense and if you have any questions, or any analysis that may contradict my analysis, please share in the comments.
Thanks for reading and I hope this may help you in your trading journey
Trade active:
Nailed the entry on this trade. Now let's just hope it goes our way.
My entry on paper trading was a little better. Either way I was in the vicinity of the ntrance of this trade and it is now active.
My entry on paper trading was a little better. Either way I was in the vicinity of the ntrance of this trade and it is now active.
Comment:
Better look at the entrance called at the time I posted this Idea.
Trade active:
Lowered the S/L to 0.29200 and added a new position at 1.29387
Comment:
Not good. Equal lows have formed at 1.29220. Smart money will go after this liquidity where people buy and have there stop losses set there. I didn't expect it to get this low for this to occur. However there is a small set of buy side liquidity that happened this morning just before todays drop. I hoping it it least runs up through that before it comes back down and takes out these equal lows. Minimize your risk is all I am saying I'm not looking for a home run anymore. I'm just looking to get some profit. at around 1.30000 to 1.30100. Maybe it will buy out for quite some time before it decides to go lower than 1.29220... but believe me, it will go lower than that within the week if not within the next few hours/minutes.
Trade closed: stop reached:
Trade failed last night. It did start buying but it retraced a alot deeper than I had thought.
Support is now at 1.30000
Support is now at 1.30000
Comment:
The real buy you would've had to have used the support level for your fib and that support was 1.28500 and measured that to the Asian session high. At the 70.5 % Level was the best entry at 1.28776 Here's the Idea on the chart
Comment:
If you look left, you see why that level is support.
You're either trading with Smart Money Theory or your just burning your money money. Believe me, I've been there.
