Now, given that this H4 supply converges with not only a psychological resistance at 1.4400, but also boasts a very nice-looking H4 approach (see black arrows), would we consider this a viable platform to short today? Well, over on the price is seen nibbling at the underside of supply chalked up at 1.4459-1.4380, thus adding weight to a reversal from our H4 supply. The weekly chart on the other hand shows price extending higher from a broken Quasimodo at 1.4051, with upside potential still seen towards a broken Quasimodo resistance line at 1.4633.
In view of the above points, we feel that price will likely decline from its current position. Owing to the convergence seen at the H4 supply (see above), our team has entered short at market from 1.4393 with a stop placed above at 1.4430. Yes, we know we have effectively sold into weekly flow here, but we’re quite confident at least 1.4350 will be achieved, which is where we plan to take partial profits and significantly reduce risk.