Given how well the current H4 demand was respected as supply in the past, traders likely view this block as a stable platform in which to enter long from. We know this because our team also saw this as a nice buy zone yesterday. However, things have changed from yesterday. Not only is weekly action still loitering around the underside of a weekly at 1.1533-1.1278, but as of yesterday’s close daily price is now seen trading from daily supply coming in at 1.1446-1.1369. This is certainly not to say that a long trade will not work from the current H4 demand as it could, all we’re saying is be prepared for a push lower.
Our suggestions: In light of the points made above, our team is this pair for the time being. Should our analysis be correct and price does indeed close lower, a short trade could be possible down to the H4 mid-way support 1.1250, followed closely by the H4 support at 1.1233 (sits within daily demand at 1.1242-1.1202 – essentially the next downside target on the ).
For most who read our analysis will already know that we’re not too fond of breakout trading, so for us to be permitted to trade this move we’d need to see two things happen. Firstly, a retest of the broken H4 demand as supply would need to be seen, and secondly a lower timeframe confirming sell signal following the retest. This signal could be in the form of an engulf of demand, a break/retest or simply a collection of well-defined selling wicks around the higher timeframe area.