The chart explains it, read the story from left to right. Price wants liquidity, that's the name of the game.
The COVID down spike from last year was a MASSIVE move to drain the sell orders out of the market.
It was initiated at 1.1500
We have yet to see any reaction at this level for over a year, the only thing there is a liquidity void on the daily.
This means price should be attracted back to this spot.
What is a void/gap? To understand why gaps fill you need to understand what a market maker does. A market maker, like OANDA, FOREX.com, etc.
When you place a trade, they take the opposite side of that trade. If you buy, they mirror that and sell the other side. So when price is ranging and people are buying and selling, the market maker is taking the opposite side of all the orders, meaning they don't lose and they make commission. WHEN A GAP APPEARS, think about it like this, on their order book price moved so fast in one direction (in this case to the upside), and that might still have negative sell orders on their books from that period in time. This is why price is usually attracted back to gaps in my opinion. It is because this price point has tons of buys on it in their books, and they have sell orders open that they need to close.
I'm expecting price to be attracted to 1.1500 because we mostly liked have trail stops from the run. These stop losses are SELL orders sitting there.
-We have trail stop orders (SELL ORDERS) sitting above 1.1500
- We have a void that market makers most likely want to buy back on their books.
-We also have that COVID sell initiation which hasn't been closed out, which should cause a reaction when closed.
-50%-61.8% Fib Zone
-Weekly Impulse Completion
- Trendline Weekly
-Double Top Pattern (I buy these, I don't sell them)
Moving forward, I'm just going to be sharing long term analysis, H4+ Charts, because I have some other projects going on and I'm going to be swing trading instead of intra day for the remainder of the year.