Hope you’re well,
We can currently see XPT running for a channel break of the lower channel limit this morning as price seems to have began its equilibrium continuation. The equilibrium zone in a chart represents an equal number of buyers and sellers creating a price harmony seen by most as a “range”.
At the moment our view is for this metal to continue trading lower and following the fact that price has just recently broken through the base of the lower limit of the channel, it seems likely that, following a retest, price could very well continue right the way down into the liquidity pool highlighted beneath the chart.
These institutional liquidity pools are formed when major players and market makers push price back down to fill larger orders at better prices. We see this often across the markets and are generally able to capatilise on the banks moves using these methods.
The idea here is to wait for a confirmed retest of the lower channel limit, followed by a 2-3 bar continuation. Following the succesful trigger, we will be aiming to target the top side of the S&D zone below at approximately 970.00 with stops likely to be above 1012.00 offering a 1:2 risk/reward.
Should price fail to continue away from the lower channel limit our view on the metal for today at least, will be invalidated.
Trade safe out there and catch you again soon.