📊 WHY CAN PRICE REVERSE WITHOUT SWEEPING THE PREVIOUS HIGH?

In ICT/SMC trading, we often learn that price tends to move toward liquidity pools, particularly those above previous highs or below previous lows.
This leads many traders to believe that price must sweep liquidity above a previous high before a bearish reversal can occur.
However, the market does not always behave this way.

1. Liquidity Does Not Exist Only at Previous Highs and Lows
Besides External Liquidity, the market also contains Internal Liquidity.
Short-term highs, lows, and areas with concentrated orders within a trading range can also provide liquidity for large transactions.
Therefore, price does not necessarily need to reach a previous high for sufficient selling pressure to emerge and trigger a reversal.

2. A Liquidity Sweep Is Not a Mandatory Condition for a Reversal
When price enters a higher-timeframe supply zone or bearish Order Block (OB), buying pressure may weaken while selling pressure increases.
If strong bearish Displacement and a Market Structure Shift (MSS) follow, these can provide early signs of changing order flow, even without sweeping the previous high.
However, these signals must still be evaluated within the broader market structure to distinguish a genuine reversal from a temporary correction.

3. Don't Treat Liquidity Sweeps as an Absolute Requirement
A common mistake is waiting for price to sweep a previous high before looking for SELL opportunities, even when a clear bearish structure has already formed.
Conversely, the fact that price has not swept the previous high does not mean the liquidity above it has disappeared. It may still become a future target.

💡 KEY TAKEAWAY
A Liquidity Sweep is a valuable trading signal, but it is not a mandatory condition for a market reversal.
Instead of focusing only on whether liquidity has been swept, analyze market structure, momentum, and price reactions to determine whether order flow is genuinely shifting.
A skilled trader does not rely on a single fixed pattern but combines multiple conditions to identify high-probability trading opportunities.

— WavePoint FX

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🚨 CPI NEWS ALERT

The US CPI report is about to be released. The market may experience high volatility, especially XAUUSD.

⚠️ Limit trading before and immediately after the release. Avoid FOMO, manage your risk, and wait for the market to stabilize before looking for new trading opportunities.

If you've been closely following my recent D1 analyses and noticed the relatively short-lived bullish structure, you probably already anticipated the possibility of this sharp decline.

I had already warned that the bullish moves were merely corrective rebounds. As expected, price dropped to 4136, then bounced back to 4156 before plunging sharply following the news release.

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