From the weekly chart, a sell-off should not really have come as much of a surprise since this pair remains trading from a major weekly supply base seen at 1.1533-1.1278. What this recent surge in selling also accomplished, however, was a slight breach beyond the daily demand at 1.1215-1.1264. This may, as far as we see things, tempt traders to target the fresh daily demand area below carved from 1.1143-1.1179.
Our suggestions: A long from the H4 demand at 1.1168-1.1198 could very well be a possibility today. Given that this area also boasts a psychological support at 1.12, sits on top of a daily demand mentioned above at 1.1143-1.1179 coupled with the inverse correlation confluence seen over on the USD/CHF , price has a fair chance to bounce from here! Nevertheless, let’s remember that the weekly chart is trading from a major area of supply (see above) and shows room to continue lower all the way down to weekly support at 1.0796, so entering on the touch (pending order) is not something we’d be comfortable doing. Waiting for lower timeframe confirmation is, in our opinion, the safer route to take here.
Levels to watch/live orders:
• Buys: 1.1168-1.1198 Tentative – confirmation required (Stop loss: dependent on where one confirms this area).
• Sells: Flat (Stop loss: N/A).