Daily Timeframe: After looking at the for some time now, we have come to the conclusion that a deep fakeout of the huge psychological number 1.6 may have happened, hence the current higher prices being seen on the pound lately. It seems from here that the path north is likely free all the way up to the 1.62503 level, as any sellers have already likely been consumed around the daily demand swap area coming in at 1.60507-1.61044.
4hr Timeframe: The 4hr timeframe on the other hand is telling a different story. Fakeout wicks (1.61154/1.61276) have pierced through the 1.61 level into a small 4hr decision-point area (1.61416-1.61237), which has no doubt filled any sellers with orders just below, around the 1.61183 area. Something else that caught our eye was the approach to this small 4hr decision-point area, notice the demand consumption wicks (1.60250/1.60432/1.60706)? This was in all likelihood well-funded traders spiking south to collect unfilled buy orders whilst rally higher, but at the same time this type of move also clears the path south for any future selling!
Let’s quickly recap here:
• Price is trading out of weekly demand at 1.58533-1.60157 = good for buying!
• Price appears to have faked below the 1.6 level seen clearly on the = good for buying!
• The 4hr timeframe shows that if the sellers wanted to bring prices back down to the 1.6 level (active buy orders may well be set above at 1.60052), or even the fakeout below at 1.59529-1.59764 (active buy orders may well be set above at 1.59797), they could with little buying opposition in their way to stop them.
So, with the above in mind, we are expecting higher prices, however, at the same time we are fully prepared for a retracement down to at least the 1.6 level beforehand.
• Buy orders: 1.60052 (Predicative stop-loss orders seen at: 1.59760) 1.59797 (Predicative stop-loss orders seen at: 1.59479).
• Sell orders: N/A (Predicative stop-loss orders seen at: N/A).