Initial trade saw a steady round of bids flow into the market yesterday from deep within a swap demand area coming in at 1.1055-1.1026. For all that though, the EUR took a turn for the worst dropping around 200 pips from highs of 1.1095 (13 pips away from out noted sell zone at supply 1.1138-1.1108) shortly after the Fed’s hawkish comments. This downside move, as you can see, took out several 4hr technical levels during its onslaught and only saw any sign of stabilizing once it reached psychological support 1.0900.
In view of price currently trading at a noteworthy psychological number right now, would we consider the 1.0900 figure a stable enough platform to buy from today? Well, the weekly chart shows price still has room to depreciate further within its current range down to demand at 1.0519-1.0798. Daily action, on the other hand, shows price crossing swords with demand at 1.0846-1.0903, which converges with a nice-looking Harmonic AB=CD bull pattern at 1.0869.
Therefore, to answer our question above in bold, we would consider this a stable enough level to look for buys today. That said, we would not be comfortable entering long at market here. There would have to be some form of lower timeframe buying confirmation seen, preferably from either the 30/60 minute timeframes before we’d consider risking capital on this idea. Should the above come to fruition, our immediate take-profit area falls in at 1.0973 – a support-turned resistance line.