A decline in value was also seen on the pound, this should come as no big surprise since the EUR/USD and GBP/USD tend to move in tandem. The weekly close came in at 1.63231, a few pips above a nice-looking weekly R/S flip level support at 1.62591. Looking at the history of this level, a bounce higher at the very least should be seen sometime this week.
The selling onslaught seen on Thursday brought prices down to a daily demand area at 1.62510-1.63401 (conveniently located just above the weekly R/S flip level support at 1.62591), which is where buyers begun to come into the market on Friday creating an average-looking pin-bar candle. The only way to find out if this buying pressure was legit and not just short covering would be to see a follow-through to the upside towards the daily D/S flip area at 1.64589-1.64949.
Current price action is consolidating around a 4hr demand area at 1.62998-1.63256, The two prominent spikes/tails (1.62858/1.62791) seen penetrating this area, and the round number 1.63 likely stopped out the majority of the traders attempting to go long around this area. Taking into consideration where price is currently located on the higher timeframes (Weekly R/S flip level support at 1.62591, Daily demand at 1.62510-1.63401), we are naturally expecting higher prices to be seen this week. Yes, the buyers are very likely consumed around this 4hr demand/round number area, which likely means price is free to hit the next area of interest, which is in our opinion down below around 4hr demand at 1.61325-1.61888. However since price is located in higher-timeframe demand at the moment, the spikes/tails below the 4hr demand area at 1.62998-1.63256 (levels above) could very well just be a fakeout to collect the much-needed liquidity for a push higher (liquidity in this case would be sell stops from the buyers stopped out, and the breakout sellers’ sell orders).
We have placed a pending buy order just above the round number 1.63 at 1.63064, since around the open, price will likely revisit this level, and continue on north up to at least the round number 1.64.
Pending orders/P.A confirmation levels:
• Areas to watch for buy orders: P.O: 1.63064 (SL: 1.62672 TP: 1.64) P.A.C: No P.A confirmation buy levels are seen in the current market environment.
• Areas to watch for sell orders: P.O: No pending sell orders are seen in the current market environment. P.A.C: No P.A confirmation sell levels are seen in the current market environment.