For all that though, price quickly corrected itself from 1.1200 going into the American session, puhing the EUR back up to where it began – our aforementioned sell zone, consequently forming an indecision candle over on the daily scale.
Given the above, do we believe a second short could be possible from this area today? Of course, it is possible, but it’s not something we’d label high probability. Instead, we now have our beady little eye on the two fresh supply zones sitting just above (1.1329-1.1301/ 1.1366-1.1349). The lower of the two zones sits within the extremes of the aforementioned daily supply, so it’s highly likely we’ll see a bounce from here at the very least. However, seeing as this area is positioned only a few pips below the upper , it’s very possible a fakeout here will be seen, and this is what we’re looking to trade, hence the fakeout zone!
From our perspective, lower timeframe confirmation will be needed if one is thinking of shorting the lower zone. Nonetheless, if you’re looking to trade the potential fakeout above this area, as we are, a pending short order at 1.1346 might be the best tool for the job in order to catch any quick spike seen. It will be interesting to see how this plays out!
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 1.1329-1.1301 Tentative- confirmation required (Stop loss: dependent on where one confirms this area) 1.1346 (Stop loss: 1.1369).