As we mentioned in yesterday’s report, we feel the higher-timeframe picture shows that this pair has room to drop further. Here’s why: weekly price is currently trading from major supply coming in at 1.1533-1.1278, whilst down on the , supply at 1.1385-1. 1332 (located just within the above said weekly supply area) has firmly established itself on its second retest. The closest support structure between the two, at least in our book, is a daily demand area penciled in at 1.1057-1.1124.
Despite all the points made above, however, the U.S. dollar index is now trading at a firm H4 resistance point drawn from the 95.67 mark at the moment, which could pressure this EUR higher today and take our stop. In consequence, 1.1200 is a key number for our team today. Continued support from this level breeds doubt for a further breakdown in price, whilst a decisive close beyond this number opens the path south down to the top-side of daily demand at 1.1124 – a clear 75-pip run! That being the case, should prices break lower, traders may want to keep an eye on any retest seen at this number for a possible short trade.
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 1.1273 LIVE (Stop loss: breakeven). Watch for price to consume 1.1200 and look to trade any retest seen thereafter (lower timeframe confirmation preferred).