ICmarkets

EUR/USD Technical outlook and review.

FX:EURUSD   Euro Fx/U.S. Dollar
50 0 3
4hr TF.

The higher picture resembles the following:

• Buyers and sellers still remain trading within weekly demand at 1.34760-1.36314.

• Trading remains capped between daily supply at 1.37297-1.36879 and daily demand below at 1.34760-1.35265.

Price opened lower at 1.35965 with the buyers seen taking complete control, with very little seen stopping them until around the 4hr decision-point supply area at 1.36632-1.36485 where sellers will likely show an appearance.
Last week we saw a break of the low 1.36013 which likely cleared a path down to at least the low 1.35746. So why the sudden burst of buying power, and not a drop straight down to the low? In the last analysis it was reported that for pro money to get price down to the low 1.35746, they would likely need liquidity, and where better than the decision-point supply area above (levels above).

A lot of traders have no doubt jumped on this sudden burst of buying power on the lower timeframes thinking it is going to the moon, but you can normally be rest assured pro money is busy selling whilst they are buying as they need to move huge amounts of capital and cannot merely click buy and sell like you and I can.

Pending/P.A confirmation orders:

• No pending buy orders (Green line) are seen in the current market environment.
• P.A confirmation buy orders (Red line) are seen just above demand (1.35018-1.35375) at 1.35417. The reason behind us placing a P.A confirmation buy order here, rather than a pending buy order is because the aforementioned demand area appears weak as deep spikes have been seen recently (marked with two arrows).

• Pending sell orders (Green line) are seen just below the decision-point supply area (1.36632-1.36485) at 1.36416. The reasoning behind placing a pending sell order here is due to the simple fact we have seen buyers consumed lower around the lows 1.36013, thus making it a low-risk high-probability trade.
• P.A confirmation sell orders (Red line) are seen just below supply (1.37224-1.37028) at 1.36894. A P.A.C order was selected here due to the reaction seen at the aforementioned supply area proving its validity. However, pro money may well decide to push price higher into this supply area if/when price returns to it, thus making it a risky trade for a stop above the high 1.36995 which could be very easily be stopped out if a pending sell order was set, hence the need to wait for confirmation.

• Areas to watch for buy orders: P.O: No pending buy orders are seen in the current market environment. P.A.C: 1.35417 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).

• Areas to watch for sell orders: P.O: 1.36416 (SL: 1.36584 TP: Dependent on price action approach).P.A.C: 1.36894 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).

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