My post above is for the pure Trading Technicians… For traders that want to incorporate FA into their trading… He’s what happened…
As far back as Monday the 5th Sept… Markets knew/speculated that UK Retail was negative and the data was due for release in 12 days… So they started to push the GBPJPY (and other GBP crosses) up and out of it’s ranging slumber (45 days) between the ~160 and ~163 level…
Over the next 4-5 days GBPJPY was painstakingly lifted into the ~166 levels, ensuring dumb money (DM) was nice and Bullish… Then on Friday the 9th Sept, pushed the price back down ~200 pips to take out DM’s stops and generate some liquidity for the next push upward during the Asian session on Monday 12th Sept.
At the London Open on Monday the 12th, the Market continued building a large short position as price consolidated for 24 hours followed by a huge spike up at the London Open on 13th Sept. trapping extra DM that jumped in long on the GBPJPY.
4 hours later at the New York open they proceeded to sell off the GBPJPY over the following 48 hours culminating in a huge 380+ pip move down, assisted by the Bullish sentiment and the release of the negative UK Retail data.
And coincidentally enough.… The GBPJPY finished the week off back at it’s Average Price of ~163
Average Low Price over the past 90 days (160) Average High Price over the Past 90 Days (166)
(~160 + ~166) / 2 = ~163)) It’s correct… I used a calculator.
Markets knew from at least the 5th that the UK Retail data was going to be poor and made damn sure they made some money out of this data release…
Please… Check your 4H or D1 charts… It will clearly display… Maybe even back test a few News Releases and you’ll see this play is no isolated incident!