Weekly gain/loss: + 14 pips
Weekly closing price: 1.0531
Since mid-December, weekly action has been drifting around a long-term weekly support area drawn from 1.0333-1.0502. Over the last week, however, despite candle action printing somewhat of an indecision candle, the major managed to close above the 2017 yearly opening level at 1.0515, which could lead to a move up to long-term weekly trendline resistance extended from the low 0.8231. Thus, do keep an eyeball on this line this week.
The story on the daily chart shows that price came within touching distance of clipping the underside of a daily supply zone seen at 1.0670-1.0623, before ending the week closing just ahead of a support level coming in at 1.0520. A daily close below this support barrier this week could open up the gates for price to challenge daily support at 1.0360, which sits deep within the aforementioned weekly support area. Based on data from daily candles, in order for weekly buyers to march north this week, we see a problematic road ahead. Not only is there the current daily supply mentioned above at 1.0670-1.0623 to contend with, but there’s also a nearby daily resistance at 1.0710. This leaves little room for maneuver as the weekly trendline resistance is positioned just above the daily resistance!
A quick recap of Friday’s trade on the H4 chart shows that the single currency eventually sold off from a H4 trendline resistance taken from the low 1.0504. This recent bout of selling was triggered by the latest US job’s report. Despite the non-farm employment data coming in lower than expected, the pair still weakened, consequently closing the day just ahead of January’s opening level at 1.0515. The US unemployment rate came in as expected: 4.7%, while average hourly earnings ticked higher at 0.4%.
Our suggestions: In view of the above, the 1.05/1.0515 region on the H4 chart looks attractive for a bounce (green circle). Reinforced by daily support at 1.0520 along with the top edge of the weekly support area at 1.0502, a rotation is likely from here and could very well bring prices back up to at December’s opening level at 1.0590/1.06 handle. While there’s strong confluence surrounding this area, we are reluctant to place pending orders here. The reason is simply due to the likelihood of a fakeout being seen through the 1.05 handle. As such, we would advise waiting for a reasonably sized H4 bull candle to form prior to pressing the buy button.
Data points to consider: There are no high-impacting news events on the docket today relating to these two markets.
Levels to watch/live orders:
• Buys: 1.05/1.0515 (reasonably sized H4 bullish close required prior to pulling the trigger, stop loss: ideally beyond the trigger candle).
• Sells: Flat (stop loss: N/A).
Weekly closing price: 1.0531
Since mid-December, weekly action has been drifting around a long-term weekly support area drawn from 1.0333-1.0502. Over the last week, however, despite candle action printing somewhat of an indecision candle, the major managed to close above the 2017 yearly opening level at 1.0515, which could lead to a move up to long-term weekly trendline resistance extended from the low 0.8231. Thus, do keep an eyeball on this line this week.
The story on the daily chart shows that price came within touching distance of clipping the underside of a daily supply zone seen at 1.0670-1.0623, before ending the week closing just ahead of a support level coming in at 1.0520. A daily close below this support barrier this week could open up the gates for price to challenge daily support at 1.0360, which sits deep within the aforementioned weekly support area. Based on data from daily candles, in order for weekly buyers to march north this week, we see a problematic road ahead. Not only is there the current daily supply mentioned above at 1.0670-1.0623 to contend with, but there’s also a nearby daily resistance at 1.0710. This leaves little room for maneuver as the weekly trendline resistance is positioned just above the daily resistance!
A quick recap of Friday’s trade on the H4 chart shows that the single currency eventually sold off from a H4 trendline resistance taken from the low 1.0504. This recent bout of selling was triggered by the latest US job’s report. Despite the non-farm employment data coming in lower than expected, the pair still weakened, consequently closing the day just ahead of January’s opening level at 1.0515. The US unemployment rate came in as expected: 4.7%, while average hourly earnings ticked higher at 0.4%.
Our suggestions: In view of the above, the 1.05/1.0515 region on the H4 chart looks attractive for a bounce (green circle). Reinforced by daily support at 1.0520 along with the top edge of the weekly support area at 1.0502, a rotation is likely from here and could very well bring prices back up to at December’s opening level at 1.0590/1.06 handle. While there’s strong confluence surrounding this area, we are reluctant to place pending orders here. The reason is simply due to the likelihood of a fakeout being seen through the 1.05 handle. As such, we would advise waiting for a reasonably sized H4 bull candle to form prior to pressing the buy button.
Data points to consider: There are no high-impacting news events on the docket today relating to these two markets.
Levels to watch/live orders:
• Buys: 1.05/1.0515 (reasonably sized H4 bullish close required prior to pulling the trigger, stop loss: ideally beyond the trigger candle).
• Sells: Flat (stop loss: N/A).
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