Weekly closing price: 1.1196
Weekly view: As you can see, the weekly candles remain hugging the underside of a major seen at 1.1533-1.1278. While we’re confident that this zone will eventually force the pair lower, it’s difficult to judge when that will be as in the past we’ve seen price consolidate for long periods before plunging south (see blue circles). The next downside targets to have an eyeball on from this neighborhood can be seen at the 1.0970 region, followed closely by a major support seen at 1.0819.
Daily view: From this angle, the major, once again, caught a bid from support coming in at 1.1135, which happens to merge with a support taken from the low 1.0516. Although this line has held firm since mid-Aug and is housed within a seen at 1.1224-1.1072 that stretches back as far as Jan 2015, trading long from here is challenging given the weekly picture. Nevertheless, a decisive break above the September 15th high at 1.1284 (red arrow) could spark a round of buying up to the supply base coming in at 1.1446-1.1369.
H4 view: Friday’s US non-farm employment change came in lower than expected at 156k, which, as can be seen from the chart, drove the common currency skyward as a result. Offers around the 1.12 handle were triggered an hour or so after the event which managed to hold the market lower into the week’s close.
Direction for the week: Similar to our last weekly report, we feel that this market will eventually decline in value. However, given the conflicting signals seen on the higher timeframes at the moment, it may be a while before we see this come to fruition.
Direction for today: By and large, our team has come to a general consensus that 1.12 may be taken out today, which in turn, will likely see the H4 candles attack the resistance extended from the high1.1366. A break above this hurdle, nonetheless, would likely stimulate an advance up to the H4 mid-way resistance 1.1250, more specifically, a H4 Quasimodo resistance at 1.1257.
Our suggestions: From our point of view, shorting the above said H4 Quasimodo formation is high probability. Not only does this level converge with a deep H4 88.6% Fib at 1.1258, it also, as mentioned above, connects nicely with the H4 mid-way resistance line. In addition, we can see that the head of this H4 Quasimodo formation (1.1279) is bolstered by the underside of the above said weekly , thus, giving this H4 setup a little more influence.
On the data front, however, we have a relatively light docket ahead of us, along with US banks being closed in observance of Columbus Day. Therefore, the H4 Quasimodo resistance may have to wait until Tuesday!
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 1.1257 (dependent on the time of day, we would consider entering here at market, Stop loss: 1.1285).