Climbing down into the , we can see that the single currency responded well from supply on Friday at 1.1385-1.1332 (located just within the above said weekly supply area). Should the bears remain dominant, demand at 1.1057-1.1124 will likely be the next area in the firing range this week.
A quick recap of Friday’s activity on the H4 chart shows that the Quasimodo resistance line at 1.1338 did an awesome job of suppressing buying early on in the action. For those who read Friday’s report (see link below) you may recall that we mentioned for shorts to be considered, price would be required to close below and retest the 1.1300 handle as resistance. As is evident from the chart, price did exactly that and printed a clear-cut selling wick. Immediately after this candle closed we entered short at 1.1273 with the expectation of holding this position over the weekend. What this signal has likely done is opened the doors to the first take-profit target at 1.1204-1.1222 – a H4 , and at the same time confirm selling strength from the higher-timeframe supplies mentioned above. Ultimately, what we’re looking at from here is a break below the H4 target demand and a continuation move down to daily demand mentioned above at 1.1057-1.1124.
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 1.1273 LIVE (Stop loss: 1.1310).