Daily Timeframe: Further buying was seen yesterday giving us the impression that the spike below daily demand at 1.24642-1.25616 was very likely a fakeout. If this is the case, the buyers are very likely free to continue pushing prices higher at least until the 1.26213 mark, where at which point we expect to see active sellers come into the market.
4hr Timeframe: We said in the previous analysis that we would not consider entering long until a fakeout of the low 1.24378 was seen, and as we can all see this did not happen. With that in mind, there was a to-the-pip buying opportunity on the retest of the round-number level 1.25 immediately after it was broken. We hope some of our readers took advantage of this.
At the time of writing, price seems to be reacting off of a small ignored Quasimodo level at 1.25380, following a minor sell off from around the 4hr support flip level at 1.25699. Price could potentially range between these two levels until the Europe session gets under way. Once bigger players enter the market, we anticipate a break lower down to around 1.25, where tentative buy orders are seen just above at 1.25047. That being said though, we must stress that entering blindly around 1.25 may not be the best path to take, since these levels are prone to deep tests/spikes. We would rather wait for lower-timeframe confirmation as this would give us a higher probability that the trade may be a successful one, at least until the next decision point on your chosen timeframe.
• Buy orders: 1.25047 (Predicative stop-loss orders seen at: 1.24669).
• Sell orders: N/A (Predicative stop-loss orders seen at: N/A).