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AverageJoe

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25/04/16

23:59

Post #: 17594440
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Originally posted by AverageJoe ↑

View attachment 171955
XAUUSD 4H

Here is an update from the one I posted on Saturday. Observe the 2 red arrow and the dump after taking out the swing high stops at the top and a very deep one as well. I think I am reading this as Banks having their algo selling into all the buy stops from Bear stops and bull breakout buy stop orders. They slammed it right down to an intermediate swing low denoted by the 2 red arrows, Notice the second red arrow just wick through the low by circa 30cents then rallied back. I was expecting the rally to at least reach the red line.

If price continue to fall and break the lower support, I suspect the banks will square off their short positions with all the sell stops sitting below. By creating 2 intermediate lows, there are a lot of bulls being drawn into the price expansion I suspect. If this support breaks then we know that they are aiming are the red zone support where potentially even more bull stops (sell stops) are sitting underneath.

We are in a range play so I think this is the realm of the banks generating liquidity above and below swing points which is their bread and butter strategy. Lets see if price will bounce...

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Price running up the big bear bar. That red line resistance looks a tad strong to break through but if it does then my suspicion that the banks will let it rally into the 1270 swing high once more. This run could potentially be the circuit breaker of the equilibrium and $1282.86 swing high could be tested again. This is as far as I dare hope for because the selling has been very strong in the recent past!
2 Upvote

0 Great analysis

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