ICmarkets

EUR/USD Technical outlook and review.

FX:EURUSD   Euro Fx/U.S. Dollar
42 0 1
Weekly TF.

Sellers on the weekly timeframe are really pushing the buyers to their limits within weekly demand at 1.34760-1.36314. Judging by the pathetic buying activity out of the aforementioned weekly demand area seen over the past few weeks, a break south will likely be seen this week. If a break does indeed happen, buyers and sellers will then be seen trading into the weekly demand area directly below at 1.32940-1.34847 (Stacked demand).

Daily TF.

Sellers have really pushed deep into daily demand at 1.34760-1.35265 which is effectively a lower timeframe daily demand area within the aforementioned weekly demand area (see above). Buying pressure was seen on Friday’s candle, could this be true rejection, or was it just pro money consuming the rest of the buyers there for a break south? Let’s take a look at an even lower timeframe to see if we can find out.

4hr TF.

Things got very interesting on Friday; a tail/spike was seen breaking the 4hr demand area at 1.35018-1.35375. It is however where price traded into that was interesting. In the last analysis, it was reported that the 4hr demand area below at 1.34760-1.34943 would not likely see a big reaction due to a spike/tail already appearing to consume the buyers there on 06.02.2014.

Clearly there were still active buyers around that area, however, something we have to bear in mind is that price did not only just break the 4hr demand area (1.35018-1.35375), it also spiked the round number 1.35000, which could well be adding to this stream of current buying activity we’re seeing.

Overall we still favor a drop to the downside around mid-week, the reason we say mid-week is because price will likely rally up to the 4hr decision point area at 1.35714-1.35609, where unfilled sell orders are likely waiting before continuing south which will possibly give pro money the much-needed liquidity they require.

Pending/P.A confirmation orders:

• No pending buy orders (Green line) are seen in the current market environment.
• No P.A confirmation buy orders (Red line) are seen in the current market environment.

• Pending sell orders (Green line) are seen just below the decision-point supply area (1.36632-1.36485) at 1.36416. The reasoning behind placing a pending sell order here is due to the simple fact we have seen buyers consumed at multiple lows and demand areas below, thus making it a low-risk high-probability trade.
• Pending sell orders (Green line) area seen just below the 4hr decision-point area (1.35714-1.35609) at 1.35596. The reason a pending sell order was allocated here is because this is where pro money (on this timeframe) possibly made the decision to sell price into the 4hr demand below at 1.35018-1.35375.
• P.A confirmation sell orders (Red line) are seen just below supply (1.37224-1.37028) at 1.36894. A P.A.C order was selected here due to the reaction seen at the aforementioned supply area proving its validity. However, pro money may well decide to push price higher into this supply area if/when price returns to it, thus making it a risky trade for a stop above the high 1.36995 which could be very easily be stopped out if a pending sell order was set, hence the need to wait for confirmation.

• Areas to watch for buy orders: P.O: No pending buy orders are seen in the current market environment. P.A.C: No P.A confirmation buy orders are seen in the current market environment.

• Areas to watch for sell orders: P.O: 1.36416 (SL: 1.36584 TP: Dependent on price action approach) 1.35596 (SL: 1.35768 TP: Dependent on price approach). P.A.C: 1.36894 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).

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