Moving across to the H4 chart, price ended the week closing above the mid-level number 0.7550, which is likely to get retested as support shortly after the markets open today. On the assumption that this level holds ground, then all eyes will be on the 0.7600/0.7650 region for potential short (confirmed) trades. Why 0.7650 when the weekly level is sitting only a four pips above 0.7600? Well, let’s not totally rule out the possibility that price may fake above this line to tag in the mid-level hurdle 0.7650 since it fuses beautifully with the 61.8% Fibonacci level discussed above on the weekly chart.
If on the other hand the H4 closes below 0.7550 today, it could then be a while before we see this weekly come into play since then the 0.7500 figure will be the next target to achieve, followed by H4 support at 0.7482. Therefore, a close below 0.7550 is in itself a signal to begin watching for price to retest this number as resistance for a confirmed short trade.
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 0.7650/0.7600 region Tentative – confirmation required (Stop loss: dependent on where one confirms this area). Watch for price to consume the 0.7550 level and look to trade any retest seen thereafter (lower timeframe confirmation required).