Volumetric analysis on October 29
During the Friday trading session, we saw the growth of this currency pair, which in principle was expected by us. However, the basic idea voiced earlier, the sale around the resistance levels is no longer looks achievable. On Friday, in the price range of 1.1390-1.1370, there was a large activity of market purchases in the futures market of the CME exchange. Therefore, we can assume that open interest remained there. Trading ideas have become more confusing. First, we forget about sales at least until at least the price has broken 1.1300. Secondly, it makes sense to rely on purchases from the range of 1.1390-1.1370, but we must understand that this is a trade in correction, which means the probability of a successful outcome is less than with trend directions. The target for growth is 1.1455 you can wait. But if the price drops below 1.1370, then it is better to forget about this pair for a while, since the probability of the outset becomes large.
We continue to implement the Friday trading idea. For Friday, the pair stood in a narrow range and accumulated trading volume. We do not know buyers or sellers entered the market, but we can assume that if a break through price level at 1.2855 take a place, then buyers take the initiative, and with any pullback, you can also consider purchases with targets at 1.2900 and maybe even 1.2960. We should forget about sales at this moment, at least the price hasn’t updated Friday low. And do not forget that in the second half of the week in the schedule is the publication of important news for the pound. Therefore, positions must not be long term prioritized.
In the price range of 1,3125-1,3160 on Friday there was a significant seller reaction. This was evident in terms of the delta, and moreover, it happened in the expected place - 1.3125-1.3230. We spoke about this place for a long time and correctly, that we feared a similar reaction. Today, this range of 1.3125-1.3160 can be identified as resistance, and in case of a price approaching it, consider selling up to 1.3060. The appearance of prices above 1.3160 will speak about the weakness of sellers and will force us to prepare for purchases, but we will only make purchases after the price passes 1.3230, which is unlikely today.