A quiet morning showing little interesting area to trade from, hence the delay in the breakdown pre ADP non-farm payrolls. Now the afternoon session profiles have opened so lets take a look if we can get some red folder news to drive the market into our key area and give us an opportunity.
The bias remains bearish on USD with crosses like GBPUSD and EURUSD potentially pushing higher throughout the afternoon.
GBP Futures (6B, Sep)
Daily TPO - The Asia low, IB and naked POC remains a clear zone to buy from if the red folder news can give us an initial bearish move. This does sit around 13 pips below the PM naked POC pictured below.
PM TPO - As our bias remains bullish we are simply looking for key levels to enter a position. The obvious level would be the naked POC on the PM chart. The daily TPO offers support a further 13 pips down which would align with the high vol nodes seen just below the POC, around 1.2620 (futures pricing)
GBPUSD 15min candlestick chart - Clear TPO levels coupled with Asia low gives the market a perfect opportunity to sell off with high volume, fill orders only to reverse and continue with the bullish move. Remain bullish with the current idea as shown below. Any other entries would not offer a good risk reward ratio to enter.
EURO Futures (6E, Sep)
Daily TPO - Similarly on EURO, the possibility of a quick 40 pip dip upon the news release remains high, therefore we are only considering buying into any such dips for the time being as any other trades don't meet our strategy or RR profile.
PM TPO - The corresponding PM levels to that of the Daily TPO fall well before the POC, in fact we could see yesterdays value area being filled running towards the high vol node and VAL. In this instance we will look for a flip in order flow to enter long.
EURUSD 15min candlestick chart - Our bias remains long however its possible the news will give us the quick sell we are looking for. For this to happen we would look to see Asia highs wiped and a flip in order flow to potentially fill the Asian range and come into our buying zone. Like the chart says, a lot will depend on how the initial reactions come but we have our levels marked where institutions are most likely to transact from.
Trade safe.
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