So, with the above in mind, what do we have here?
1. A distinct pin candle formed deep within supply at 1.1532-1.1278 during last week’s trade. This, at least to us, hints a further sell-off may take place this week.
2. From the , we can see that price retested the underside of an ignored Quasimodo level at 1.1372 yesterday. Should the sellers remain in good form below this level, there’s very little reason why this market will not continue to depreciate down to demand sitting at 1.1211-1.1268.
3. Since the higher timeframe picture indicates further downside is possible in this market today/this week, we are looking at the following areas to trade short from, targeting 1.1300 as our first take-profit area:
• Mid-level resistance 1.1350. This level was not retested on the 4hr view following yesterday’s break, hence there may be unfilled sell orders still lurking around this barrier (lower timeframe confirmation required).
• Supply at 1.1378-1.1362. This area sits just above 1.1350 and looks not only to be a perfect zone for well-funded traders to fakeout to above 1.1350, it also encapsulates the aforementioned ignored daily Quasimodo level. Stops are likely huddled tightly just above 1.1350. We know this, and so do players who move price! Therefore, be prepared for a fake above 1.1350 (hence confirmation needed at 1.1350 if you intend to short there) into this supply today as it could make for a lovely short trade. We would, dependent on how price approached this zone and the time of day, likely be confident enough to enter at market here, given its location.
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 1.1350 Tentative – confirmation required (Stop loss: dependent on where one confirms this level) 1.1358 (Stop loss: 1.1380).