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 will give us an opportunity to break the upper-trendline of the closed triangle on the daily timeframe and possibly even reach the monthly critical near 139.000.
After we made the prediction that the price will receive strong support on the neckline of the “W” formation, it has been breaking critical areas ever since. Now after we saw a strong close above the 135.500 zone, we can expect a move towards the upper-trendline.
Nevertheless, we must be careful with our moves, because we are entering high volatility zones. Therefore, we have 2 possible scenarios:
1. The more likely one is based on the strong COT “long” contract positions. Price will break the upper-trendline of the closed triangle near 137.000, do a small correction and the go towards the monthly/daily critical area near 139.000. Afterwards a stronger correction will take place.
2. Price gets rejected by the strong selling pressure coming from the upper-trendline of the monthly closed triangle. If that happens a move towards 134.000 may be expected.
Warning! Be careful with your buy orders, because a possible “M” formation may happen. The 139.000 aligns also perfectly with the 0.618 Fibonacci downwave in March. This could lead to a drastic move towards the 132.000 area or bellow.
Happy Trading!
After we made the prediction that the price will receive strong support on the neckline of the “W” formation, it has been breaking critical areas ever since. Now after we saw a strong close above the 135.500 zone, we can expect a move towards the upper-trendline.
Nevertheless, we must be careful with our moves, because we are entering high volatility zones. Therefore, we have 2 possible scenarios:
1. The more likely one is based on the strong COT “long” contract positions. Price will break the upper-trendline of the closed triangle near 137.000, do a small correction and the go towards the monthly/daily critical area near 139.000. Afterwards a stronger correction will take place.
2. Price gets rejected by the strong selling pressure coming from the upper-trendline of the monthly closed triangle. If that happens a move towards 134.000 may be expected.
Warning! Be careful with your buy orders, because a possible “M” formation may happen. The 139.000 aligns also perfectly with the 0.618 Fibonacci downwave in March. This could lead to a drastic move towards the 132.000 area or bellow.
Happy Trading!