Daily Timeframe: The shows exactly why a sell off was seen last week, and it comes in the form of a daily decision-point supply area coming in at 0.88961-0.88302. A deep test of this area has forced the buyers to take a back seat on this one, as the sellers drove price deep into a (weak) daily demand area seen at 0.86183-0.87183. Let’s take a look at the 4hr timeframe to see what else we can see.
4hr Timeframe: As per the 4hr timeframe, the only support barrier left within both the weekly and daily demand areas (levels above) is a 4hr Quasimodo seen at 0.86629 (active buy orders seen just above at 0.86692), since all other prior areas of demand have already consumed.
However, this 4hr Quasimodo should not be underestimated in our opinion, as this level lines up perfectly with a major low to the far left seen at 0.86591, and as such, we are expecting some sort of reaction to be seen here. If any traders are considering entering long here it may be a good idea to recognize that the 0.87 level is looming just above, so, waiting for a close above this level as a way of confirmation first is likely the best path to take.
However, assuming a close below this 4hr Quasimodo is seen, we think it may be the end of the road for the buyers, since the path south is likely free to drop down to at least the 0.86 level, which if you remember is a little below both the aforementioned higher-timeframe demand areas.
• Buy orders: 0.86692 (Predicative stop-loss orders seen at: 0.86346).
• Sell orders: N/A (Predicative stop-loss orders seen at: N/A).