Tricky pair for us today - flat. Anyone seeing direction??
This morning’s analysis will kick-off with a look at the weekly chart, which shows that price beautifully retested the underside of the recently broken weekly demand at 0.7438-0.7315 as supply. In the event that the bears continuing punishing the bulls here, it’s likely this pair will be shaking hands with weekly demand at 0.7108-0.7186 sometime soon. Moving down to the daily chart, nevertheless, support is being seen from just below daily demand at 0.7259-0.7226 around a 61.8% Fibonacci support at 0.7210. Now, with the recently breached daily demand and pressure from weekly sellers, it is unlikely this Fib level is going to hold. The next downside target beyond this line can be seen around daily demand at 0.7108-0.7140 which sits within the extremes of the above said weekly demand.
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 AB=CD bullish 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 bearish 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.
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 AB=CD bullish 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 bearish 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.
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