Daily view: Yesterday’s daily action shows that price came within FIVE pips of hitting the daily Quasimodo cluster zone coming in at 1.1390/1.1421 (located relatively deep within the aforementioned weekly supply area) before selling off.
4hr view: During the course of yesterday’s sessions, price aggressively pushed above the round number 1.1300, and attacked our first sell zone seen in yellow (between the 4hr supply area at 1.1378-1.1335 and a 4hr Quasimodo base at 1.1443-1.1411). As you can see, the rebound from this yellow sell zone was violent, and as a result pushed price back down to the 1.1300 region.
Given the fact that price is trading not only within a clear weekly , but at the same time is also loitering so very close to a daily Quasimodo cluster area (see above) at the moment, we believe this market will eventually sell off. Now that price has tagged our first sell zone in yellow (no confirming signal was seen to short unfortunately), the only place we’d feel confident in selling this pair is around the aforementioned 4hr Quasimodo base (located deep within both higher timeframe resistances). A pending sell order has been set just below at 1.1407 with a stop placed above at 1.1469.
One may be thinking that if we’re expecting price to rally up to the 4hr Quasimodo base today, would it be an idea to enter long up to this area? We’re afraid that is down to each individual trader. For us personally, however, we do not like the idea (even though we expect a rally) of entering long into clear higher timeframe opposition.
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 1.1407 (Stop loss: 1.1469).