Moving down to the , it’s clear to see that the EUR turned going into Wednesday’s session from support at 1.0725. This, as a result, broke above 1.0813 on Thursday and held beautifully as support on Friday, as price pinned this barrier to-the-pip and closed the day painting a buying tail. Should traders be looking to go long this pair based on this buying momentum, we see little room for price to stretch its legs. Directly above, a formation of stacked supply waits at 1.1072-1.1013/1.0992-1.0951.
Turning our attention to the H4, US nonfarm payrolls surged at 292k in December versus 252k in November (revised up from 211k). The unemployment rate was steady at 5.0% for a third consecutive month. Following this release the EUR immediately fell, slightly surpassing daily support at 1.0813 and just missing psychological support at 1.0800. Despite this, the U.S. dollar could not maintain this momentum as bids flooded the market rallying price over 100 pips, ending the week nudging into a drawn from 1.0946-1.0931.
Given that today’s fundamental docket is relatively light, today’s action could be somewhat limited. That being said, we really only have one level on our watch list this week – the H4 Quasimodo at 1.0984. Here’s why:
1. It converges beautifully with the upper range band seen on the mentioned above at 1.0983.
2. Daily supply at 1.0992-1.0951 encapsulates this H4 level.
3. The 78.6 Fibonacci level fuses nicely with the barrier.
In light of the above confluence, our team has placed a pending sell order at 1.0983, with a stop above daily supply at 1.0994. Targets will be determined by the approach to our sell zone.
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 1.0983 (Stop loss: 1.0994).