Daily Timeframe: Yesterday’s trading action reveals that after three days of rather frustrating sideways movement, prices eventually broke out south, consequently a daily demand area seen at 1.1443-1.1533 in the process. This will likely set the stage for a further decline in value down towards a small daily decision-point demand area seen at 1.1225-1.1283.
4hr Timeframe: The 4hr timeframe shows that the buyers and sellers continued to range between a 4hr at 1.1530-1.1546, and a 4hr supply area at 1.1647-1.1625 ahead of the ECB’s press conference yesterday. Once the meeting got under way, the Euro sold off and consumed not only the 1.1500 handle, but also 1.1400 as well.
Prices closing below 1.1400 would likely suggest a more bias going into today and possibly next week. With that being said, we are now closely watching prices for a retest of 1.1400, as this could potentially be a nice location to sell, targeting 1.1300 (floating just above the aforementioned small daily decision-point demand area). Selling at 1.1400 with a pending order is a risky trade in our book. A more conservative approach would be to wait for a confirming price action on the lower timeframes, as psychological barriers such as these are sometimes victim to deep tests at times.
Current buy/sell levels:
• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: watching for confirmation around the 1.1400 region (Predicative stop-loss orders seen at: dependent on where one confirms this level).