Last week’s trading action shows price painted a nice-looking weekly pin-bar candle off the upper limits of a weekly ascending extended from the low 1.0461. As a consequence the week ended relatively neutral, losing only 18 pips into the close 1.0962. Turning our attention to the , we can see that from Wednesday onwards, candle action printed consecutive higher highs as well as producing a beautiful array of buying tails, which, as you can see, stabbed below the minor daily demand area at 1.0868-1.0926 on two out of the three trading days (bids likely consumed here now).
Friday’s non-farm payrolls data added 215k Jobs in the month of July, only slightly missing expectations of 222k. Despite this, a quick surge of USD buyers came into the market, reaching lows of 1.0854. Following this, however, price quickly bounced back taking out the ignored 4hr Quasimodo level at 1.0924, and all in all driving close to 120 pips north into 4hr supply coming in at 1.0986-1.0968 to end the week. While NFP data fell short of expectations, the employment number is likely to be considered strong enough to imply a Fed rate hike in September.
As we enter into a fresh week of trade, it’s clear to see that price remained unaffected during the weekend as the market opened at Friday’s closing number, 1.0962. In that price is still lurking just below the aforementioned 4hr supply, selling from this barrier may not be the best path to take considering what we saw last week from the 4hr timeframe’s bigger brothers (see above in bold). In addition to this, as far as we can see, both the weekly and daily timeframes still showroom to move further north this week until at least the daily swap (resistance) level at 1.1148. Once, or indeed if price manages to get above this daily hurdle, then we’ll be eyeing the weekly supply area given at 1.1532-1.1278.
With everything taken into consideration, selling this market is not something we are likely going to be participating in today/this week. Buying, however, is certainly a possibility, but will only be permitted once/if a clean close above the large psychological barrier 1.1000 (and preferably a retest of this number as well) is seen as per the red arrows. The space above this number provides a clear 80-pip target up to at least 1.1082 – a defined 4hr Quasimodo .
Levels to watch/live orders:
• Buys: Watch for both 1.0986-1.0968 and 1.1000 to be consumed and then look to enter on a confirmed retest seen at the 1.1000 region.
• Sells: Flat (Stop loss: N/A).