• The depth of each pullback has retained a certain amount of symmetry (see black lines), and the most recent pullback has, judging by past retracements, now reached its limit. Therefore, a close above 1.12 (effectively breaking this symmetry) could spark further buying in this market.
• The breakout above the H4 channel resistance (1.1616) is not really a concern of ours since a breakout of the H4 channel support (1.1500) was seen between the 5th and 9th of May (green circle), and price, as can be seen from the chart, continued to honor the channel boundaries following the break.
From a higher-timeframe perspective, however, our team is . The weekly chart, as we’ve mentioned several times already, shows that ever since price whipsawed through the upper boundary of a major weekly at 1.1533-1.1278 the bears have been in control. Furthermore, the next downside target, as we see it, does not come into view until weekly support seen at 1.0796. Along the same vein, we can see daily action now flirting with the underside of a daily supply base drawn from 1.1215-1.1264, which saw a small end-of-day correction yesterday.
Our suggestions: Technically, we would be surprised to see this pair close above 1.12 today. To that end, our prime focus will be on looking to short this number with the aid of a lower timeframe confirming setup. Should all go to plan, partial profits would be liquated around minor H4 demand seen marked with a blue circle at 1.1128-1.1146, and the remainder will be left in the market to run until 1.1057-1.1096 – a H4 demand base that sits within the extremes of a daily demand area at 1.1057-1.1108 (the next downside target on the ).
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 1.12 region Tentative – confirmation required (Stop loss: dependent on where one confirms this area).