The H4 candles, as you can see, failed to generate much follow-through buying after crossing the large psychological boundary 1.30 during yesterday’s London morning session. Consequent to this, the H4 mid-level support at 1.2950 was consumed and, as we write, May’s opening level seen nearby at 1.2927 is currently being challenged. Beyond this monthly level, key support rests around the 1.29 handle. Here’s why:
• H4 channel support converges with 1.29 taken from the low 1.2804.
• H4 trendline support etched from the high 1.2987 also fuses with 1.29.
• A H4 AB=CD (see black arrows) 127.2% Fib ext. at 1.29 taken from the high 1.3033 lines up beautifully with the 1.29 level.
While this small area does appear tempting, we still have to take into account what the higher-timeframe structure is telling us, which, in our opinion, is not really supportive. Weekly price remains trading from a supply base drawn from 1.3120-1.2957, and daily action continues to trade from a supply seen within the said weekly supply at 1.3058-1.2979. The closest higher-timeframe support rests at 1.2843.
Our suggestions: Although the higher timeframes point to further selling, there’s no reason not to expect a bounce from the 1.2888/1.2907 (green rectangle) today. How much of a bounce is difficult to judge since we could find resistance around May’s opening level mentioned above at 1.2927, so we’d recommend handling this trade aggressively here guys.
Data points to consider: US Core durable goods orders and US prelim GDP q/q at 1.30pm GMT+1.
• H4 channel support converges with 1.29 taken from the low 1.2804.
• H4 trendline support etched from the high 1.2987 also fuses with 1.29.
• A H4 AB=CD (see black arrows) 127.2% Fib ext. at 1.29 taken from the high 1.3033 lines up beautifully with the 1.29 level.
While this small area does appear tempting, we still have to take into account what the higher-timeframe structure is telling us, which, in our opinion, is not really supportive. Weekly price remains trading from a supply base drawn from 1.3120-1.2957, and daily action continues to trade from a supply seen within the said weekly supply at 1.3058-1.2979. The closest higher-timeframe support rests at 1.2843.
Our suggestions: Although the higher timeframes point to further selling, there’s no reason not to expect a bounce from the 1.2888/1.2907 (green rectangle) today. How much of a bounce is difficult to judge since we could find resistance around May’s opening level mentioned above at 1.2927, so we’d recommend handling this trade aggressively here guys.
Data points to consider: US Core durable goods orders and US prelim GDP q/q at 1.30pm GMT+1.
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