Yesterday’s London open saw the single currency resume its decline against the U.S. dollar, losing around eighty pips on the day. Both daily support at 1.1460 and H4 support at 1.1447 were taken out (now acting resistances), leaving the EUR free to shake hands with H4 demand coming in at 1.1400-1.1383. Due to this barrier fusing with psychological support 1.1400 and located nearby a 61.8% H4 Fibonacci support at 1.1368, as well as sitting on top of a daily demand base carved from 1.1385-1.1332 (blue circle), longs could be a possibility today.
Before we all get too excited though, the weekly chart shows that price resides within a major area of weekly supply chalked up at 1.1533-1.1278. This zone has held price lower since May 2015 so it is certainly not a barrier to be ignored.
So let’s just run through what we have here: Weekly is trading from supply and both the Daily and H4 are currently crossing paths with demand. In view of this, we feel a bounce could be seen from the H4 area highlighted within the blue circle (see above) today, but the most we’d expect from this move is H4 resistance 1.1447 due to what we’re seeing on the weekly picture (see above). In addition to this, we would highly recommend waiting for lower timeframe confirmation to form before risking capital here, as placing oneself on the wrong side of weekly flow is quite a risky play in our book. Finally, due to the mighty NFP taking the stage later on today, technicals might be sidelined during this time, so remain vigilant!
Levels to watch/live orders:
• Buys: 1.1368/1.1400 Tentative – confirmation required (Stop loss: dependent on where one confirms this area). • Sells: Flat (Stop loss: N/A).
Comments
jaxx
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Hello
You are saying "Stop loss: dependent on where one confirms this area" -> when we see lower TF confirmation, do we put the SL exactly below the last low , which was the rejection?
Thanks
ICmarkets
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Hi Jaxx,
Please see the top section of this report. This should answer your question.
You are saying "Stop loss: dependent on where one confirms this area" -> when we see lower TF confirmation, do we put the SL exactly below the last low , which was the rejection?
Thanks