Weekly closing price: 1.1082
Weekly opening price: 1.1010
Weekly view: The weekly at 1.1533-1.1278, once again, played a big part in last week’s trading. Taking into consideration that this zone has primarily capped upside since May 2015 (see red arrows), we feel that price will eventually touch base with weekly support penciled in at 1.0796 in the near future.
Daily view: As can be seen from this chart, ‘Brexit’ forced the shared currency over 500 pips lower from a peak of 1.1427 down to lows of 1.0911. Nevertheless, the pair managed to trim some of the losses from deep within the confines of a Daily reversal zone (1.0910/1.0994 – green zone) back up to 1.1082 by the week’s end. With price currently trading between the aforementioned reversal zone and a near-term daily supply area at 1.1057-1.1108, direction on this timeframe is somewhat limited until one of these zones is consumed.
H4 view: Despite Friday’s aggressive selling, the EUR, as we mentioned above, managed to recover some of its losses from 1.0911. As is shown on the H4 chart though, going into both the London and US sessions, price found a pocket of resistance around the 1.1162 region, forcing the candles below the 1.11 handle into the week’s close.
Our suggestions: ‘Post Brexit’ trading will likely see an increase in as political uncertainty continues to plague markets in the weeks ahead. Given this, battle lines going into today’s sessions and quite possibly the week are as follows:
• Although the weekly chart shows price trading from a weekly at 1.1533-1.1278, we still really like the look of the H4 Quasimodo support line at 1.0940. Not only is this number positioned within the daily reversal zone at 1.0910/1.0994, it was also here where price began to reverse following the ‘Brexit’ shock, which in our opinion, equals very strong support!
• The H4 resistance 1.1162 is also a line we’ll be keeping an eye on today/this week simply due to the fact that this is where price also managed to bounce during ‘Brexit’.
Given the likelihood of increased , we would not recommend placing pending orders at either of the above said barriers as you’re potentially opening yourself up to the possibility of getting faked out. Waiting for lower timeframe confirmation is, in our opinion, the best path to take. Confirmation for our team is either a break of a supply/demand followed by a subsequent retest, a break/retest or simply a collection of well-defined buying/selling tails/wicks around the higher timeframe level.