Scanning across to the H4 chart, the 0.7500 handle once again provided this market a base to trade from on Friday which saw highs of 0.7579 hit going into the U.S. open. The day ended with price closing mid-range between 0.7500/7600.
With the overall picture in mind, here is what we have jotted down for this week’s trading:
• 0.7500 is a key number in our opinion. Reason being is that if this line suffers a break, we would be interested in looking for (lower timeframe) confirmed shorts on any retest seen at this number, targeting H4 demand at 0.7414-0.7435 (positioned just within weekly demand at 0.7438-0.7315). Reason being is that a convincing push below 0.7500 suggests weakness within daily demand and strength from weekly resistance (see above).
• The H4 tops seen around the 0.7637 region (pink circle) are also important to us. In spite of this area representing the weekly 61.8% Fibonacci area at 0.7646, H4 candle action shows supply consumption here (check out the wicks seen at 0.7629 and 0.7639), in other words, weakness from the sell-side of this market. Therefore, upon a sustained move above 0.7600, one could begin hunting for longs up to the next fresh resistance hurdle, which from where we’re standing appears to be the 0.7700 mark.
Levels to watch/live orders:
• Buys: Watch for price to consume 0.7600 and look to trade any retest seen thereafter (lower timeframe confirmation required).
• Sells: Watch for price to consume 0.7500 and look to trade any retest seen thereafter (lower timeframe confirmation required).