Although the timing of the COT report is not too reliable, it does currently imply risk of reversal of trend in GBPUSD. It would seem from this report, that currently, over 86% of speculators are net long, not really leaving the door open for too many new speculative buyers to come in and move price up. Also, commercial positioning seems pretty extreme short as well - over 80%. Open interest has been declining, granted it is pretty normal around this time - perhaps a double top and lower open interest will end the rally. As for the shorter term, we are at the top of channel on 1600 tick chart, as long as this high holds, on a close, this could be the start of the move down to the 200SMA on 4hr chart, which is currently in mid 94's. The other scenario that I see as probable is that price will converge with 200SMA by just trading more or less sideways, at which point we will have a good point for new buyers to come in at a seemingly good price, or for net long speculators to unwind the remainders on drop below the 200SMA.
In the meantime, I will be looking closesly at my oscilators for patterns of short term trend continuation and reversals and take what I can on a portion and allowing the remainder to travel freely. Although I feel this scenario is probable, it is still wise to stay very cautious as ADX has also bottomed out and is beginning to rise, a breakout soon may occur, although I feel a breakout to the long side is very likely to be a false breakout accompanied by diminishing momentum, volume, and i will most likely try to use it to position myself short. Once again, just an opinion.
Sad to say this but, let's sit and wait...
for a lot of people this is where they get hurt, because they dont have the patience to wait. Those that do have a far greater chance at success. I am eager to get back into the swing of things, but will only trade when my signals are there. I think a lot of us know what happens when we stray from our methods and try to predict the market.
Well said ces, lets all just be patient
