What we also spoke about in yesterday’s analysis was the mid-level number 1.1950 coupled with the H4 supply above at 1.0992-1.0973 was an area we’d consider shorting from. Reason being is that not only does it fuse beautifully with daily supply at 1.0992-1.0951, but the upper H4 supply also encapsulates the 1.0983 weekly level which has capped upside since early December 2015.
As you can see, price has already begun to sell-off from 1.0950 and could very well continue doing so down to at least 1.0900. If one were to short from here, the safest place for stops in our opinion would be above the H4 supply. Therefore, by shorting at current prices we’d be limiting ourselves to a risk/reward of 1:1. Ideally we would like to achieve higher than this so no sells will be initiated, at least on our account, at current prices. Instead what we’re looking for is a bounce higher into the pink circle – a short at the H4 supply would be perfect since the risk/reward from this barrier increases dramatically, if targeting 1.0900.
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 1.0971 Pending order (Stop loss: 1.0996).