Daily view: From this angle, demand at 1.4297-1.4393 held firm during yesterday’s session clawing back some of Friday’s losses. Despite this, we do not see this pair trading beyond resistance at 1.4470 this week due to what we’ve noted on the weekly chart.
H4 view: Yesterday’s modest rally from demand at 1.4318-1.4349, as you can see, brought Cable up to psychological resistance 1.44 by the day’s end. Beyond 1.44 is a Quasimodo resistance barrier drawn from 1.4488, which sits only a few pips above the daily resistance line at 1.4470.
Given our notes on both the weekly and daily timeframes (see above), our team has no plan to buy above 1.44 today. What we are interested in, however, is a possible short from the Quasimodo resistance 1.4488. Not only does it converge closely with nearby daily resistance, but it also has the 1.45 handle just above it giving our line extra weight!
Entering into a market position from 1.4488 is a possibility if one is willing to place their stops above the apex of the Quasimodo formation around the 1.4531 mark. If you prefer tighter stops, you may want to consider waiting for lower timeframe confirmation. This could be either a break of a demand and subsequent retest, a break/retest or simply a collection of well-defined selling wicks around a lower-timeframe resistance. Stops are usually placed 5-10 pips beyond confirming structures.