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Previous Day High / Low Break and RetestPDH / PDL liquidity levels

Evidence: ModerateBeginnerBreakout · Support & Resistance

The previous trading day's high and low are the most widely watched intraday levels in FX. The trade is continuation on the break of one of them.

There are two variants — the direct break, and the break followed by a retest. This page shows the retest, because its stop is far tighter and it carries evidence that the level was accepted.

The session filter is a structural part of this strategy, not an optional improvement.

Category
Breakout · Support & Resistance
Timeframe
D1 levels · H1 / M15 execution
Suitable pairs
EURUSD · GBPUSD · XAUUSD · USDJPY · indices
Session
London and New York only — Asian-session breaks are filtered out
Indicators / tools
Previous day high and low · ATR(14) · session boxes · EMA(20) on D1, optional

Valid setup

S09 · PREVIOUS-DAY HIGH BREAK AND RETEST — VALID SETUP EURUSD · H1 · PDH/PDL are where resting stop orders actually sit (Osler, FRBNY) LONG 1.0755 1.0790 1.0825 1.0860 1.0895 1.0930 1.0965 PREVIOUS DAY ASIAN — skipped LONDON NY PDH — buy-side liquidity resting above PDL — sell-side liquidity resting below ENTRY on the retest hold SL below the reclaimed level +2R reference 1R +2R 1 2 3 4 5 6 ① Previous day's high and low — fixed at the daily close ② Asian session stays below the PDH. Any break here is skipped: thin liquidity, and it usually reverses. ③ London: H1 CLOSE above the PDH ④ Retest — price returns to the level and HOLDS above it. This is what separates acceptance from a spike. ⑤ Entry on the reclaim; the stop is far tighter than on the break. ⑥ Target: the next structural reference (prior week high). 1.0889 1.0854 1.0844 1.0836 1.0769 new day 00:00 07:00 London entry

Exact rules

Entry

  • Calculate the previous day's high and low from a consistent server time, and write down where your broker's day boundary falls.
  • Session gate: accept breaks between 07:00 and 16:00 GMT only.
  • Break: an H1 close above the previous day high plus spread.
  • Retest: price returns to that level and forms a rejection or hold bar that closes back above it.
  • Enter at the close of that confirmation bar, or at the next bar's open — document which variant you are running.
  • Optional bias gate: D1 close above the 20-EMA means long only.

Stop loss

  • 0.5–0.6 × ATR(H1) below the reclaimed level.
  • This is the whole point of waiting for the retest: the stop is much tighter than on a break entry, so the same target gives a better reward-to-risk.
  • If price closes back below the level, the thesis is finished — exit. It has been reclaimed from the other side.

Take profit / exit

  • Structural targets: the previous week's high or low, or the next major swing.
  • Or exit at the day close.
  • Minimum 1:2 against the honest invalidation. If the ratio only looks acceptable once you push the target further out, the setup has failed this gate.

Build Previous Day High / Low Break and Retest

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Trading carries risk and most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade. The chart is an illustration of the rules on constructed candles — it is not a record of a trade and not a backtest.