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Sterling (GBP/USD) Meltdown

In our morning Market Overview, we pointed out we were bearish on GBP/USD coming into the London Open.

Let’s see what happened!

Sellers came in early, and 75 Cygni showed us they took control between 04:00-05:00 CEST as candles started to print red, signaling sellers are coming into the market heavily. There was an opportunity to go short out of the gate (first red arrow), but we were still well inside the AOI (gray zone) so that would be a bit riskier entry. But it has give us very good information – Market is unable to push past Bearish Volume Zone I. (gray dots).

When London Open came, market has rejected the AOI prices heavily, pushing the market downside – past the Bearish Volume Zone III.

At this point we had a lot of confirmation for the shorts:

  • Red Candles (sellers in control)
  • Trading below AOI (bearish)
  • Bearish Volume Zone I. holding

All we needed to do is wait for the market to retest Bearish Volume Zone I., once it happened sellers came in aggressively once again so plenty of setups for the shorts yesterday. We had a couple more retests later on, which all went into instant profits, demonstrating the impact of analyzing the market volume dynamics.

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