Stepping across to the H4 chart, price dived lower on the back of comments from the FOMC yesterday, bringing this market through H4 support at 0.7241 and into the jaws of H4 demand at 0.7200-0.7234.
Our suggestions: In favor of buying from the current H4 demand, traders have the daily 61.8% fib support at 0.7210 backing this area. In addition to this, there is a H4 approach that completes around the 0.7204 mark (see black arrows). However, our team has come to a general consensus that buying from here is not a high-probability move due to the following reasons:
• Weekly action chalking up a position (see above).
• H4 resistance lurking within the H4 demand at 0.7241 alongside the mid-way H4 resistance just above it at 0.7250.
Therefore, shorts could be considered on the break of the current H4 demand but remain aware that the top side of the aforementioned weekly demand sits fourteen pips below! As much as we’d like to short below here since daily price shows potential to move lower, we just cannot condone a sell into weekly demand. As such, we have decided to remain flat going into today’s trade.