Daily Timeframe: The shows a spike/tail (0.77840) below the daily demand area at 0.77894-0.78271 was seen last week. This move has very likely cleared out a lot of buyers, and looks like a perfect fakeout. With that being said, we have to be prepared for price to decline even further towards an extreme area of daily demand coming in at 0.77507-0.77772 before higher prices are seen. This area is extreme in our opinion because it remains to be the overall origin of a humongous rally that begun on the 23/07/12, making it an area well-funded traders are very likely paying attention to.
4hr Timeframe: The market opened at 0.78052, and shortly after, the 0.78 level got tested for the third time (0.77981). Sell orders seem to have been consumed around the decision-point level seen marked with a blue arrow at 0.78176, which likely indicates price is free to move up to the next set of sell orders seen just below the 4hr decision-point level (0.78311) at 0.78292.
Be that as it may, before higher prices are seen, a forth test of the 0.78 level could very well take place, in a last attempt to gobble up any fresh buy orders possibly coming into the market around the 0.78023 area.
Let’s quickly recap here, we have the following:
1. Price is currently trading within weekly demand (0.76931-0.78623) at the moment.
2. A potential fakeout below a daily demand area (0.77894-0.78271) has been seen.
3. At the time of writing, we have, in our opinion, price action on the 4hr timeframe presenting itself.
So, with that in mind, our bias remains north.
• Buy orders: 0.78023 (Predicative stop-loss orders seen at: 0.77970).
• Sell orders: 0.78292 (Predicative stop-loss orders seen at: 0.78399).