Weekly closing price: 0.7670
Weekly view: Following two back-to-back selling wicks, the commodity currency changed course last week and rallied higher. This, as you can see, forced the market to close above a resistance taken from the high 0.8295 (now acting support) which has potentially opened the trapdoor for a move north this week up to resistance chalked in at 0.7846.
Daily view: Despite the weekly chart indicating further buying may be on the cards this week, we cannot ignore the fact that the daily candles ended the week closing just ahead of both a resistance taken from the high 0.7835 and a seen chiseled in at 0.7765-0.7714. Withstanding numerous attacks, this area of resistance has managed to cap upside since May! Therefore, it deserves respect.
H4 view: The impact of Friday’s US job’s report was relatively minimal. What was interesting regarding Friday’s movements though was that we saw price whipsaw through support extended from the high 0.7734 and touch ground with October’s monthly open level at 0.7652.
Direction for the week: In light of the current higher-timeframe structure, medium-term direction is tricky. Buyers face opposition from the aforementioned daily supply and its partnering resistance, while sellers have to contend with the possibility of follow-through buying above the current weekly . Hence, we do not currently have a preference on weekly direction.
Direction for today: Regardless of weekly direction, we feel a bounce could be seen from the 0.7644/0.7652 region today (green ). Building a case for entry we have the following structures:
1. The aforementioned H4 support.
2. October’s monthly open at 0.7652.
3. H4 61.8% FIB support at 0.7644.
4. H4 mid-way support at 0.7650.
Our suggestions: While a bounce from the above said H4 buy zone is likely, we have to keep in mind that the bigger picture is neutral for the time being, as in no definite direction is being seen as far as structure is concerned (see above). Furthermore, as October’s monthly open has already been tested, bids may have been weakened around this vicinity. As such, we would advise waiting for a lower timeframe confirming buy signal to form prior to pulling the trigger here.
With the above points taken on board, keep in mind that investor focus is likely to be on Tuesday’s US elections and could cause unexpected moves in the financial markets.
Data points to consider: There are no high-impacting events due for release on Monday.
Levels to watch/live orders:
• Buys: 0.7644/0.7652 region (lower timeframe confirmation required prior to entry, stop loss: dependent on where one confirms this area).
• Sells: Flat (stop loss: N/A).