As we highlighted in Thursday’s report, the single currency was likely to find resistance within the H4 (green) sell zone at 1.0777/1.0750. The area comprised of a H4 supply zone at 1.0773-1.0751, a H4 mid-level resistance at 1.0750 and a H4 61.8% Fib resistance at 1.0777 (taken from the high 1.0905). Also of note was the daily resistance found within the upper limits of the said H4 supply base at 1.0772.
H4 price, as you can see, aggressively drove into the jaws of this zone and crossed swords with both the noted H4 61.8% resistance and daily resistance, before turning lower and closing the day ahead of the 1.07 handle. Although this move chalked up a nice-looking daily selling wick, sellers now not only have to contend with the 1.07 figure, they also have to compete with a daily support area seen in play at 1.0714-1.0683.
Our suggestions: Technically speaking, there’s limited downside potential seen in this market at the moment. Even if 1.07 is cleared, there’s a nearby H4 support area seen at 1.0677-1.0665, as well as the daily support area that’s already in motion.
With that, what about considering longs from 1.07 given the current daily support area? This could be an option, although, we would prefer to see more H4 confluence fusing with 1.07. To be on the safe side, we’d highly recommend waiting for a reasonably sized H4 bull candle to form before committing. That way, price has a good chance of at least achieving 1.0750.
Data points to consider: Eurozone manufacturing at 8-9am. FOMC member Kashkari speaks at 2.30pm GMT+1.
H4 price, as you can see, aggressively drove into the jaws of this zone and crossed swords with both the noted H4 61.8% resistance and daily resistance, before turning lower and closing the day ahead of the 1.07 handle. Although this move chalked up a nice-looking daily selling wick, sellers now not only have to contend with the 1.07 figure, they also have to compete with a daily support area seen in play at 1.0714-1.0683.
Our suggestions: Technically speaking, there’s limited downside potential seen in this market at the moment. Even if 1.07 is cleared, there’s a nearby H4 support area seen at 1.0677-1.0665, as well as the daily support area that’s already in motion.
With that, what about considering longs from 1.07 given the current daily support area? This could be an option, although, we would prefer to see more H4 confluence fusing with 1.07. To be on the safe side, we’d highly recommend waiting for a reasonably sized H4 bull candle to form before committing. That way, price has a good chance of at least achieving 1.0750.
Data points to consider: Eurozone manufacturing at 8-9am. FOMC member Kashkari speaks at 2.30pm GMT+1.
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