Going into the early hours of yesterday’s sessions, a relatively strong wave of bids came into the market consequently pushing price up to the underside of supply at 1.1329-1.1301, reaching highs of 1.1325 on the day.
This is just beautiful price action forming here guys! As we mentioned in our previous report (blog.icmarkets.com/thursday-8th-october-volatile-moves-expected-between-11am-12-30pm-gmt-in-gbp-and-usd-markets-remain-vigilant/), there is just a mine field of buy stops above current price begging to be taken! The two red arrows mark resistance points with buy stops likely residing above (1.1318/1.1325). This should be obvious to those who read our last analysis. However, what we did not mention yesterday was there are also buy stops almost certainly sitting just above the aforementioned supply area as well. The big boys know this, and this is exactly why we believe the above said stops will be taken out and price will drive into supply at 1.1366-1.1349. Why this area? Well, it’s fresh; it converges nicely with mid-level resistance at 1.1350 and also coincides with the channel resistance extended from the high 1.1294.
Now, tie all of the above in together with converging weekly and daily supply (1.1532-1.1278/1.1329-1.1269), and we have one awesome sell zone to watch today!