ICmarkets

EUR/USD: Lower prices are still expected to be seen!

FX:EURUSD   Euro Fx/U.S. Dollar
60 0 1
4hr TF.

The higher-timeframe picture resembles the following:

• Weekly TF: After a solid close below weekly demand at 1.32940-1.34847, buyers and sellers are now seen battling it out within the weekly demand area below at 1.31037-1.32262.
• Daily TF: Price is trading within a fantastic-looking daily demand area at 1.31037-1.31755. We are prepared for lower prices deeper into this daily demand area, but ultimately we do expect higher prices to be seen in the end.

Pro money pushed higher than expected above the round number 1.32, clearly they wanted to take out more stops from traders attempting to fade this level and trap as many breakout buyers as they possibly could. Notice after the break occurred, a retest was seen, a lot of traders would have likely gone long there as well! This move gave pro money a lot of liquidity (buys for their sells) with this move. From here price was slammed back down into 4hr demand at 1.35599-1.31879 where buyers have once again shown a little interest around the 1.31585 level.

We still favor a drop down to the fresh 4hr demand area at 1.31037-1.31278 (a pending buy order is set just above at 1.31333), since most of the sellers have likely been cleared with that spike/tail marked with a blue arrow (below the 4hr demand at 1.35599-1.31879), it should be relatively easy to hit. If this does happen, price will be then trading deeper into both weekly demand at 1.31037-1.32262, and daily demand at 1.31037-1.31755.

Pending orders/P.A confirmation levels:

• Pending buy orders (Green line) are seen just above 4hr demand (1.31037-1.31278) at 1.31333. We strongly believe a first-time reaction will be seen here due to where price is located on the higher-timeframe picture (Weekly demand: 1.31037-1.32262. Daily demand: 1.31037-1.31755).
• No P.A confirmation buy levels (Red line) are seen in the current market environment.

• No pending sell orders (Green line) are seen in the current market environment.
• P.A confirmation sell levels (Red line) are seen just below the 4hr D/S flip area (1.33360-1.33619) at 1.33322. The reasoning behind setting a P.A confirmation sell level here and not a pending sell order is because we have no logical area for a stop-loss order meaning price could push straight through this area.
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