Red zones- critical zones based on the daily time frame
Blue zones – critical zones based on the 4h time frame
Orange zones – critical zones based on the 1h time frame
According to last week’s GBP COT report we can see a strong increase in the long “contract” sizes. Even a decrease in short positions can be seen within the long-term investors. This can lead to a strong break above the 136.000 mark.
From a technical perspective we are in a closed triangle on the daily timeframe since the beginning of March. Its bottom and upper trendlines have been respected multiple times and right now we are just above the bottom one. On the 1H timeframe we are in a closed triangle structure since the July 6 and we are at its end. According to the COT data we can expect a second attempt for a close above the daily critical 136.000 area.
Crucial is here to enter at the right moment and for that we have 2 good possibilities:
1. Price respects the daily and 1H bottom trendlines near the 134.100 area and goes straight towards the daily critical 136.000 mark, creating multiple higher highs along the way.
2. Price does a false breakout from both triangles and goes towards the “W” neckline on the 4H timeframe near 133.600 where it gets rejected. Afterwards it will go for the 136.000 mark and as mentioned above, it will create multiple higher highs along the way.
A strong rejection on the 1H/4H timeframes from one of the zones will be a good indicator to enter.
Happy trading!
Blue zones – critical zones based on the 4h time frame
Orange zones – critical zones based on the 1h time frame
According to last week’s GBP COT report we can see a strong increase in the long “contract” sizes. Even a decrease in short positions can be seen within the long-term investors. This can lead to a strong break above the 136.000 mark.
From a technical perspective we are in a closed triangle on the daily timeframe since the beginning of March. Its bottom and upper trendlines have been respected multiple times and right now we are just above the bottom one. On the 1H timeframe we are in a closed triangle structure since the July 6 and we are at its end. According to the COT data we can expect a second attempt for a close above the daily critical 136.000 area.
Crucial is here to enter at the right moment and for that we have 2 good possibilities:
1. Price respects the daily and 1H bottom trendlines near the 134.100 area and goes straight towards the daily critical 136.000 mark, creating multiple higher highs along the way.
2. Price does a false breakout from both triangles and goes towards the “W” neckline on the 4H timeframe near 133.600 where it gets rejected. Afterwards it will go for the 136.000 mark and as mentioned above, it will create multiple higher highs along the way.
A strong rejection on the 1H/4H timeframes from one of the zones will be a good indicator to enter.
Happy trading!