GBPUSD is trading near a support formed at 19th May, and is also near an up trendline coming back from 20th April. After the Pound bull market being stopped by professional selling around 1.578 (purple signals), and consequently going into a correction, more recently it has seen buying at this level. This may mean this is actually re-accumulation, and so the bull market may be sustained. The background reflects this and it shows up as strong.
If prices stabilize in a few more bars (i.e. they don’t make lower lows), and make a higher high, there is a potential long entry in a down bar. Meanwhile it’s important to notice that there is another validated trendline, to the downside. So if prices break the support, and the background keeps being strong or neutral, I’ll look for a strong signal near the lower part of the channel.
This would hav ebeen a good trade if the prices were nearer to the support, as the background(100) was strong and there were demand signals near the support, signaling that the smart money was buying. See Nearby support trading.
1. Background (100) was strong
2. There was a strong signal near the support, which means there was demand
3. Wait for an entry bar near the support. The Yen gave plenty of chances to enter, and some even at a better price than at this trade
4. Exit after a Supply signal. Note that there was a previous Minor Supply signal, but 2 of those are required to exit, as those often just signal a temporary reversal.
