Daily Timeframe: In a similar fashion to the , the shows a break below the aforementioned weekly Quasimodo would likely inspire the sellers to continue pushing this market south towards a daily Quasimodo visible at 1.0780, which is conveniently located deep within the major weekly demand area mentioned above at 1.0760-1.0988.
4hr Timeframe: Friday’s trading action saw prices drop 160 pips on Friday. This move not only consumed 1.1300, but it also broke below a 4hr (limits: 1.2568-16/12/14, 1.2370-11/12/14), which subsequently forced price to viciously assault 1.1200.
Given the points made above, what can we expect from the Euro this week? From a technical perspective, this pair is in a great position to be looking for buy trades at the moment, with price currently dancing around a weekly Quasimodo at 1.1109. However, with the current state the Eurozone is in at the moment, buying right now may not be the best path to take, no matter how attractive the higher-timeframe technical picture looks.
This brings us to the next point – selling? Selling this pair would, again from a technical perspective go against our conservative nature as we usually avoid selling into higher-timeframe structures (see above). Nonetheless, with the Euro expected to continue declining in value, our team has come to a general consensus that we’ll primarily be focusing our energy on short trades (WITH confirmation) for the time being.
As we can all see, price closed the week just above the 1.2300 handle. This coupled with higher-timeframe support from the weekly Quasimodo level (level above), there may be enough buying pressure here to push the Euro higher to retest 1.1300, which with lower-timeframe confirmation; we’d be very interested in selling at. Failing that, a break below 1.1200 early on today would focus our attention on 1.1200 for possible retesting opportunities down to 1.1100.
Current buy/sell levels:
• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: watching for lower-timeframe confirmation around the 1.1300 area (Predicative stop-loss orders seen at: dependent on where one confirms this level).