In the below chart, the three red arrows represent when buyers pushed price up to a critical zone around the 1.30415 level. Each time buyers pressed the attack and brought price to or near to this level, sellers fought back and pushed the price back down.
The last time sellers fought back, they didn't push the price down nearly as low as they did on their previous counter-attack. Buyers immediately gained confidence, so much so that they were buying Cable at a higher price rather than allowing sellers to push this instrument back down to 1.26110 where sellers last managed to drive the price on June 20. This buying action which began on July 12 resulted in pure buying activity that managed to push out and close the week above the previously mentioned key level of 1.30415.
Remember - what was once resistance now becomes support. If we agree to this general rule of technical analysis, then I am expecting price to pullback to this level to test and confirm it, at which point we will have a long trade setup with generous room to the upside.
** I will update this idea once prices tests this level and whether or not it presents a trade setup or not **
GBPUSD
The last time sellers fought back, they didn't push the price down nearly as low as they did on their previous counter-attack. Buyers immediately gained confidence, so much so that they were buying Cable at a higher price rather than allowing sellers to push this instrument back down to 1.26110 where sellers last managed to drive the price on June 20. This buying action which began on July 12 resulted in pure buying activity that managed to push out and close the week above the previously mentioned key level of 1.30415.
Remember - what was once resistance now becomes support. If we agree to this general rule of technical analysis, then I am expecting price to pullback to this level to test and confirm it, at which point we will have a long trade setup with generous room to the upside.
** I will update this idea once prices tests this level and whether or not it presents a trade setup or not **
GBPUSD
Comment:
GBPUSD has pulled back very nicely. I would prefer to see it pull a bit further back, but on the 1 hour chart if the current candlestick that closes at 9AM EST closes at its highs, then I will enter the trade as I would believe the pullback to be over.
Trade active:
Entered trade at 1.30769
Stop Loss: 1.30135
Target 1: 1.31600
Target 2: 1.32000
Target 3: 1.32440
Stop Loss: 1.30135
Target 1: 1.31600
Target 2: 1.32000
Target 3: 1.32440
1) When sellers began to take the price lower on July 3, buyers stepped in at a much higher level on July 12 than they did on July 21, signalling their confidence in their ability to break into new highs.
2) The buying activity from July 12 - 14 is very strong, with very little selling presence, indicating strong control from the bulls.
3) The daily candlestick that closed on July 14 cleared the 1.30415 key level with some considerable distance. This is important because it indicated that the buyers most likely took out the sellers' stop-losses positioned just above this level. Once these stop-losses were cleared, they only added further buying momentum.