For those who read Thursday’s report you may recall that we highlighted a H4 resistance seen at 0.7632, which happened to converge with a H4 AB=CD 161.8% ext. point at 0.7633, along with a H4 trendline resistance taken from the high 0.8103. We also mentioned that although this level boasted strong confluence, it was a somewhat risky sell according to daily structure. This is because the lower edge of a daily supply at 0.7695-0.7657 sits only 25 or so pips above the H4 resistance, and thus could attract a fakeout.
As is evident from the H4 timeframe, nonetheless, the H4 resistance managed to hold firm as price entered into a consolidation phase largely due to the US bank holiday. Despite H4 price clearly finding resistance around the 0.7632 region, we are a little wary here since there were no distinct H4 bearish candles formed during yesterday’s segment.
Suggestions: If you intend on selling 0.7632, the team would still strongly advise waiting for at least a H4 bearish candle to form, preferably in the shape of a full or near-full-bodied candle. This will help avoid a fakeout should it occur.
Data points to consider: No high-impacting events on the docket today.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A). • Sells: 0.7632 region (waiting for a reasonably sized H4 bearish candle to form – preferably a full or near-full-bodied candle – is advised, stop loss: ideally beyond the candle’s wick).