Weekly closing price: 1.1135
Weekly opening price: 1.1124
Weekly view: From the , we can see that price is now effectively trading mid-range between a long-term weekly coming in at 1.1533-1.1278, and a long-term weekly support line seen at 1.0796. Both areas have stood the test of time, and as such either one could play a significant role in where this market moves this week.
Daily view: Following a relatively healthy bounce from the daily reversal zone (1.0910/1.0994) last week, the single currency took out daily supply at 1.1057-1.1108 (now acting demand) on Wednesday, and has been hovering above this area since. The next upside target from here falls in at 1.1203 – a daily resistance line coupled with a H4 38.2% Fib resistance at 1.1178.
H4 view: A quick recap of Friday’s sessions on the H4 chart shows price bounced nicely from the 1.11 handle going into London trade. This, as you can see, forced candle action to touch base with the H4 at 1.1170-1.1150 (H4 mid-way resistance at 1.1150/H4 resistance at 1.1162/ H4 50.0% Fib resistance at 1.1170), which is where we saw the market pullback as US trading got under way.
With only a ten-pip change seen at this morning’s open, where do we see this market moving today/this week?
• Weekly candles can move either way.
• Daily action on the other hand shows that price will probably rally to touch gloves with daily resistance at 1.1203.
• From the H4 chart, the structure below appears cramped so we are going to try and steer away from shorts this week if we can. To the upside, we see space beyond H4 resistance at 1.1233 up to H4 supply at 1.1303-1.1287, and also above this zone up towards the H4 Quasimodo resistance at 1.1410 (green circles).
Our suggestions: From where we’re standing, there is no immediate trading opportunity seen on this pair. We will, nevertheless, be keeping a close eye on the H4 resistance line at 1.1233 since a break above this level is a cue to begin hunting for longs, as is a break above the H4 supply at 1.1303-1.1287.
To enter above either of these barriers, our team would need to see price retest the broken lines as support, followed by a lower timeframe buy signal. This could be in the form of a break of supply followed by a subsequent retest, a break/retest or simply a collection of well-defined buying tails around the higher timeframe level.