GBPUSD H4 – Mark Down after Distribution Phase
- We have been witnessing as pound was ranging between 1.55 and 1.65 for a period more than 1 month. It was distribution phase where professionals have been distributing their positions to weak holders.
- In the end of distribution phase there was mark-up through upper trading range. Supply signal tells us about imbalance between supply and demand created because uninformed traders are buying in this move. High volume and closing of this bar in the middle says that professionals are busy selling to the weak holders.
- VSA is all about weak and strong signals in the market that we assess looking at overall picture. When the price comes to lower trading range, we see wide spread down bar. High volume and weak background tell us that this was a genuine break-out.
- Again we see high volume down bar before the price breaks support (previous low).
Now the price has come to another support. At the moment we do not see supply signals. Background is still weak. We need to wait further development because there is possibility that the price will start reaction to the down trend.