<aside> <img src="/icons/reorder_gray.svg" alt="/icons/reorder_gray.svg" width="40px" /> Grading Price swing. PD array Matrix. Breakaway Gaps. Inversion Gaps. Disregard FVG. Bond market. Inter-market relations. SD Projections.
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We expected DXY to draw into the Weekly -OB and also the FVG to become an Inversion level. Because all of uncertainty in the world right now, like the debt ceiling in the U.S or the war. These things cause concern and that concern is a catalyst for flight to quality or safe heaven which DXY still is. That typically sets the DXY going higher and FX lower. If we anticipate higher DXY we need to have certain levels to aim for. Looking at the -OB, we have 3: low, open and MTH. We were looking if dollar wanted to go for MTH. It did last week. And also the FVG acted as Support intraday 2 weeks ago and also previous week too.
After we found Support on the Inversion gap we went straight into the Daily -OB.
💡Order block does not need to be an engulfing candle. It’s the idea that the market is rotating after hitting a key level and you go to the last candle.
If we go back to the Daily chart again. Look at all of the encapsulation between the 2 OBs’. The majority of the trading volume is shown by the bodies. Price indeed expanded higher as we expect. Notice how all the sustained price runs were on the Buyside delivery (up candles). So as price is reaching up and up and up and then when finally pierced the MTH of the Weekly OB, then we had rotation lower. Where to? Well the Inversion FVG and act as Support. That’s narrative! DOL is most important thing, where is price trying to gravitate to? Well, initially we started with the Weekly OB, then Daily OB and finally weekly MTH.
Then sometimes the market will be messy like in this highlighted area. Then its best stay away and don’t touch it. Relax. But until when?
Till you see Shift in MS. The market breaks that Swing High and leaves FVG.
So our Draw on price was that Weekly FVG with the context that we’ll trade to it and trough it, come down and act as Support. That would make it an Inversion FVG. If we didn’t have that expectation it would be treated as standard FVG in Premium.
💎Normally we would look for the first FVG at Equilibrium or above.
💎No Imbalance on a LTF chart, doesn’t mean that price is balanced because on the HTF it is still inefficient.
Even though these individual daily candles have worked inside that range, that's not balanced. You're seeing the formation of that Weekly FVG on the daily chart. It's something you have to study on your own, working a HTF down to LTF. the HTF’s are parent and the LTF’s are subordinate. They're only going to behave in a manner that allows certain price delivery within the context and constructs of a HTF imbalance or liquidity pool. That's it. 💎That's the Liquidity Continuum:
So.. Why did ICT was looking at that FVG? Why was it important? Why did he wanted to see it act as Inversion level?
Because it is at Equilibrium from the Dealing Range 👆. So if we are waiting to see price to try to gravitate to the FVG, we want to see how does it perform. We don't want to see it go up there and then sharply break lower because if it does that then we got to drop down to a LTF and look for a FVG or something else on a short-term Premium to sell short and aim for the REL down below. But ICT’s experience told him that all the factors that's going on right now in the world geopolitically, all the turmoil, all the things that's going on the economy, all that stuff calls for uncertainty. And because of that we want to see, yes, the PD array is going to be a draw on liquidity. It's going to draw up to that Weekly FVG but we already knew not to view it as an area to go short from, but rather go through it and act as Support.