The EUR/USD fell the best part of last week closing near the weekly lows at 1.29498. Price broke the weekly demand area at 1.31037-1.32262 potentially clearing the way down to a prominent weekly ‘buy zone’ at 1.26591-1.28010.
The shows price dropped like a rock on Thursday, creating a beautiful daily decision-point area (supply) at 1.31589-1.31091. Buying did come into the market on Friday, but nothing to get excited about, as all this could have been was traders taking profits on their short positions. Anyhow, this week could still see a further decline in price down to around the daily demand area at 1.27541-1.28676, since the path south appears to be relatively clear. Be that as it may, before this happens, traders should be prepared for a rally up to around the aforementioned daily decision-point area, since pro money may not have the required liquidity to push prices south any further (willing buys for their sells).
At the time of writing, current price action appears to be confined between the round number 1.3, and the 4hr S/D flip area at 1.28970-1.28590, with the round number 1.29 being seen just above. Early this week it is very likely pro money will want to collect any unfilled sell orders left around the round number 1.3, we have a P.A confirmation sell level set just below at 1.29950 ready and waiting, we personally need confirmation at round-number levels since they are regularly prone to deep tests (spikes). If active selling is seen here, we expect a drop down to at least the aforementioned 4hr S/D flip area and round number 1.29 (located just above a daily demand area at 1.27541-1.28676) where we have yet another P.A confirmation buy level set just above at 1.29056.
If a break above is seen, we’ll be looking to take advantage of a possible retest up to an obvious 4hr supply area at 1.31589-1.31326 (which is located deep within the daily decision-point area at 1.31589-1.31326).
Pending orders/P.A confirmation levels:
• Areas to watch for buy orders: P.O: No pending buy orders are seen in the current market environment. P.A.C: 1.29056 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).
• Areas to watch for sell orders: P.O: No pending sell orders are seen in the current market environment. P.A.C: 1.29950 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).