Encapsulating the 2017 yearly opening level mentioned above at 0.7199 is a daily printed at 0.7203-0.7165. Note this area boasts strong momentum to the downside out of its base, indicating strength. It might also be worth noting we have another layer of supply directly above (stacked supply) at 0.7246-0.7178.
A closer reading of this market pulls in the H4 candles which currently hover just south of its 0.72 handle. 0.72 remains a critical level in this market, according to our analysis. Besides the H4 offering a confirming overbought reading, 0.72 also represents the 2017 yearly opening level at 0.7199 on the . Further adding to this, traders may also want to acknowledge daily supply around 0.7203-0.7165 currently in play.
Areas of consideration:
0.72 is a key level in this market for potential shorts. As round numbers are prone to stop runs/fakeouts, however, traders are urged to consider waiting for additional confirmation to form before pulling the trigger. A pattern, for example, not only identifies seller interest, it also offers structure that defines entry and stop parameters.
In terms of downside targets from 0.72, the 0.71 handle appears logical, thus providing traders ample room to secure reasonable risk/reward.
Today’s data points: US CPI m/m and US Core CPI m/m.