NZDCAD recently swept liquidity just above the previous daily high (PDH) and tapped into a premium supply zone, signaling potential exhaustion from buyers. Immediately after, the price formed a Change of Character (CHoCH), followed by a Break of Structure (BOS) to the downside—clear signs of distribution in the Smart Money framework.
This movement suggests that institutional players may have used the liquidity above the PDH to fill sell orders, initiating a reversal. The market is now showing signs of a shift from bullish to bearish momentum.
🧠 Confluences for the trade:
Liquidity grab above PDH (classic trap for late buyers).
Price rejected the supply zone with momentum.
Structure flipped: HH → LH and BOS to the downside.
RSI entered overbought and diverged slightly from price (momentum weakening).
Multiple BOS confirm sellers in control on the lower timeframe.
The best strategy here would be to wait for price to retrace back into the imbalance or a refined lower timeframe order block within the supply zone, confirming that sellers are still defending that area before considering a short.
This movement suggests that institutional players may have used the liquidity above the PDH to fill sell orders, initiating a reversal. The market is now showing signs of a shift from bullish to bearish momentum.
🧠 Confluences for the trade:
Liquidity grab above PDH (classic trap for late buyers).
Price rejected the supply zone with momentum.
Structure flipped: HH → LH and BOS to the downside.
RSI entered overbought and diverged slightly from price (momentum weakening).
Multiple BOS confirm sellers in control on the lower timeframe.
The best strategy here would be to wait for price to retrace back into the imbalance or a refined lower timeframe order block within the supply zone, confirming that sellers are still defending that area before considering a short.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.