GBP/USD 30 Minute Chart
An excellent trade on cable this morning as the pair broke away from congestion at the volume point of control on the 30-minute chart as the London forex session opened. The initial weakness was signaled with the effort to rise on good volume and closing with a deep wick to the upper body.
This attempt to rise also hit strong resistance on the accumulation and distribution indicator denoted with the red dashed line. Heavy selling then followed with the wide spread down candle on high volume. Wyckoff’s third law of effort and result.
Then comes the re-entry signal if you missed the breakaway. High volume on an effort to rise. The market makers are selling into weakness here and preparing for the next leg down. These are extremely strong signals and a terrific place to enter, in preparation for the continuation lower.
And of course this is an anomaly – effort and result are in disagreement! And down we go, with cable now trading at 1.2283.
