One of the most crucial things I have learned being a professional trader is having the ability to change your perspective on a market when the evidence suggests you should. With this being said, I has a short position on the $eurusd that was stopped out and when I get stopped out of a trade that should work it means my analysis is wrong and when I get my analysis wrong it makes me go back to the drawing board and examine every piece of price action to determine what exactly is wrong with it. So all day and all night yesterday I did exactly that and I am glad I did because I uncovered a lot of things that were hiding in plain sight.
A few weeks ago I was bearish the #dollar and mentioned how #gold shorts were at extremes in my journal entry here https://www.whiteoakfx.com/blog/gold-and-dxy-usdollar-suggest-a-reversal-is-coming . Since then, the $dxy broke higher through a weekly supply zone leaving behind a weekly demand that was poorly formed and with much congestion to the left of it. I drew an ascending trend line connecting price action which was very tricky to read but yesterday after reviewing my trading journal notes on spotting trend in unclear situations, I made a specific rule based on thousands of observations that is very particular and when I compared my drawings to the weekly chart of the #usd I realized the weekly chart is not in an uptrend and with this revelation, the idea that the weekly poorly formed demand holds becomes unlikely. Combining this and what I noticed about #gold’s potential reversal and what this most recent #cftc data suggests, I think it’s safe the say that indeed a reversal is likely. Now we still need some zones to be taken out to be for sure but knowing this I will be cautious with my trading and wait for proof to present itself before committing capital to some trades.
This current market is a tough one to read and the #cftc data is playing a serious role in determining the next moves that are to come. Stay safe out there!
Magic Trader
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