Daily Timeframe: Yesterday’s trading action caused the Euro to break above the daily swap level at 1.1378, and rally towards a compact daily decision-point supply area seen at 1.1678-1.1540 (located deep within the aforementioned weekly supply area).
4hr Timeframe: The situation on the 4hr timeframe shows that the recent rally in price has taken out multiple resistance barriers in the process. The upward momentum however seems to be crumbling as sellers appear to be entering the market around the 1.1500 handle.
A break above 1.1500 would likely prompt a rapid retest and force the market northbound once more up to a combined 4hr supply/Quasimodo at 1.1678-1.1589/1.1637.Considering that price is currently trading around both weekly and daily supply at the moment; we’re going to put buy orders on the back burner for time being and concentrate on sells.
Risk/reward parameters restrict us from shorting at 1.1500 with support lurking just below at 1.1458. Ultimately, what we’re watching for is price to break north here and rally towards the aforementioned 4hr supply/Quasimodo , where we believe two pending sell orders can be set (half the position on each), the first at 1.1582 just below the actual zone, the second set just below the Quasimodo at 1.1630. Both trades have the same stop-loss location set at 1.1690.
We feel relatively comfortable shorting here due to all the ducks lining up so to speak, essentially meaning all timeframes in agreement with one another.
Current buy/sell levels:
• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: 1.1582 (Predicative stop-loss orders seen at: 1.1690) 1.1630 (Predicative stop-loss orders seen at: 1.1690).