action on the other hand, shows that last week’s trade began with a daily inverted pin-bar candle off the top-side of a daily swap (support) level coming in at 1.0820 (located just above the weekly demand area at 1.0519-1.0798). Following this, price then spent the remainder of the week pressing forward until we reached an area of daily supply given at 1.1083-1.1006 which held the market lower into the close.
For those who read Friday’s report on the Euro (http://blog.icmarkets.com/friday-24th-july-daily-technical-outlook-and-review/), you may recall that we took a short position from 1.10013 around the 4hr supply area at 1.1034-1.1000. Being conservative traders, we did not really want to leave this position running over the weekend and considering price was lurking close to our entry level near the close, we decided to wrap it up and liquidate our position for small profits at 1.0969.
Considering that the is showing that price bounced from a weekly demand, and the reveals price is now nibbling the underside of daily supply (see above), it is very difficult to judge direction going into this week. Therefore, at least for today anyway, we’re going to focus our energy on hunting for small intraday moves from pre-determined levels of interest:
Potential buy zones:
1. Friday’s low 1.0924 will likely see a bounce, whether this bounce will be enough to capitalize on though is anybody’s guess.
2. The round number 1.0900. This could provide a wonderful base to look for an intraday play from. The reason being is simply because well-funded traders may seek to fake below Friday’s low and tag in bids sitting at this psychological threshold.
Potential sell zones:
1. The same place where we took our short trade late last week (see above), the 4hr supply area at 1.1034-1.1000, which boasts not only resistance from the round number at 1.0000 and the 50.0% Fibonacci level, but is also located within a daily supply area coming in at 1.1083-1.1006.
Just to be clear here, we have no intention in setting pending orders at any of the above said areas, we would need to see the lower timeframe confirmation before we considered risking capital.
Good luck this week guys!