Daily view: From this angle, however, we can see that after price connected with the lower limits of a daily Quasimodo cluster zone at 1.1390/1.1421 (located relatively deep within the aforementioned weekly supply area) on Wednesday, price reverted into what we like to call a mid-range phase. Essentially, all this means is that price is currently trading in no man’s land between the aforementioned daily Quasimodo cluster zone and a daily swap area seen in yellow at 1.1051-1.1000.
4hr view: The open 1.1209 saw price gap down 52 pips, placing the Euro only a few pips above round-number support at 1.1200.
Large weekend gaps such as this tend to get filled pretty quickly. And we’re sure that most would agree that the obvious place to try and take a long is around 1.1200. That said though, if you look just below this number, you’ll see a 4hr Quasimodo in green at 1.1181. This is where we have placed our buy order – 1.11845 to be exact, with a stop set just below 1.11474. Round numbers tend to see fakeouts from time-to-time; this to us is a hunt for liquidity i.e. stops. What we’re essentially trying to do here is catch this stop hunt by entering below the psychological number. Our target, if our order gets filled, will be set just below the 4hr Quasimodo in red (1.1276) at 1.12698.
In addition to the above, we believe that between 1.1276 and the round number just above it at 1.1300 is a great place to look for (lower timeframe) confirmed sells into this market today if price should reach this high. The reason we say this is simply because of where price is located on the at the moment (see above – weekly supply). If we time the entry short correctly, we could be in for a nice ride south this week down to at least the 4hr demand area coming in at 1.1048-1.1096, which sits just above the yellow daily swap area at 1.1051-1.1000.
Levels to watch/live orders:
• Buys: 1.11845 (Stop loss: 1.11474).
• Sells: 1.1276/1.1300 (Stop loss: dependent on where one confirms this area).