With the possible Smart Money Trade Divergence in mind, we know this week will bring new opportunities! From glancing at the charts I can see that a possible long scenario could be in play in the gbpusd.
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| Monday might see a move higher as it will be the 4th day (trade day) in the Power of 3 setup. |
With the recent rally in the eurusd, it's conceivable that the gbpusd too will retrace from its recent sell off. With a possible Power of 3 setup on the daily idea chart, last week's price low hit the 127.1 extension of the previous week's range, and also hit the 79.3 fibonacci retracement of the rally from 1.1987ish to 1.2705ish. The level of 1.2140 has also been an area of recent support. This idea will be completely invalidated if we trade below 1.1980.
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| With stops resting just above the market and support below, we may have a favorable long setup. |
On Friday, in the eurusd, we could surmise that the opportunity to buy was during the New York Open Killzone. Price retraced into the Asian Range and traded into an Optimal Trade Entry setup in favor of our Higher Timeframe analysis I covered here. Had you been a bull going into the week, NFP or not, you would have hauled in some pips.
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| According to ICT, price will sometimes retrace into the Asian Range during one of the Killzones and provide a clean entry into the market. |
As for the coming week, we can see in the idea chart below, that Friday's rally traded directly into a 61.8 fibonacci retracement. This coincides with the stops that were run near the 1.0680 previous high. It is very possible that we may see a retracement that takes us into the Buy Order Block near 1.0590 or 1.0545.
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| Friday's high has nullified that stops that previously rested there. By creating a new high we may turned Market Flow north. |
Beware, there are stops close below that are ready to be raided. Depending how the week progresses, being short near the 1.0730 level might be the better call.
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