Yellow zones- critical zones based on the monthly/weekly time frame
Red zones- critical zones based on the daily time frame
Blue zones – critical zones based on the 4h time frame
According to the last COT report, GBP has a big decrease in short contracts and logically an increase in long contracts, which can be an indicator for a position reversal. If this continues we can finally see the GBP price moving back towards its equilibrium levels.
This week the GBPUSD price range between the daily critical zone near 1.26370 and the 4H critical zone near 1.25000 which is also a strong psychological point. Right now the price is once again heading towards the 1.25000 and there are 3 possible scenarios:
1. Price gets rejected from the 4H critical zone and does a strong close above the first daily critical. Afterwards it can easily move towards the next daily critical at the 1.27600 area, where we will most like see a correction towards the previous daily critical.
2. Price rejects the first 4H critical zone near the 1.25000 level and it heads towards the second 4H critical zone near the 1.23500 area, where buyers will step in. After support is received, most likely price will move straight towards the daily critical around the 1.26370 area where a small correction may take place before we see a move towards the upper daily critical zone.
3. Price rejects the second critical zone at 1.23500 and moves towards the monthly critical area near the 1.21000 level. Massive buying pressure will be seen there. For sure the price will reach the second 4H critical zone near the 1.23500 area.
The latest COT Report excludes the 3rd scenario, but from a technical perspective it still remains possible.
Happy Trading!
Red zones- critical zones based on the daily time frame
Blue zones – critical zones based on the 4h time frame
According to the last COT report, GBP has a big decrease in short contracts and logically an increase in long contracts, which can be an indicator for a position reversal. If this continues we can finally see the GBP price moving back towards its equilibrium levels.
This week the GBPUSD price range between the daily critical zone near 1.26370 and the 4H critical zone near 1.25000 which is also a strong psychological point. Right now the price is once again heading towards the 1.25000 and there are 3 possible scenarios:
1. Price gets rejected from the 4H critical zone and does a strong close above the first daily critical. Afterwards it can easily move towards the next daily critical at the 1.27600 area, where we will most like see a correction towards the previous daily critical.
2. Price rejects the first 4H critical zone near the 1.25000 level and it heads towards the second 4H critical zone near the 1.23500 area, where buyers will step in. After support is received, most likely price will move straight towards the daily critical around the 1.26370 area where a small correction may take place before we see a move towards the upper daily critical zone.
3. Price rejects the second critical zone at 1.23500 and moves towards the monthly critical area near the 1.21000 level. Massive buying pressure will be seen there. For sure the price will reach the second 4H critical zone near the 1.23500 area.
The latest COT Report excludes the 3rd scenario, but from a technical perspective it still remains possible.
Happy Trading!