Daily Timeframe: The reveals exactly why we are a bit cautious about buying into this market. Price has been consolidating between a minor daily support flip level seen at 1.61609 and a combined daily demand/Quasimodo coming in at 1.58533-1.59914/1.58934 since the 03/10/2014 (located deep within the aforementioned weekly demand area). It is only until one of these areas is consumed; we will then have some idea on future direction. This however does not mean we cannot take small positions within this range on the lower timeframes though, as price has just reacted beautifully off of the aforementioned Quasimodo , and has room to trade to the upper limits of this daily range. Let’s take a look on the 4hr timeframe, and see what we can find.
4hr Timeframe: The 4hr timeframe is showing some very nice-looking price action within the downward trending channel (marked in pink) at the moment. As we can clearly see price did continue south towards a 4hr demand area at 1.58533-1.58915 (located deep both within the weekly and daily demand areas mentioned above), and as anticipated a reaction has been seen. Well done to anyone who got long around the 1.58960 area!
In our opinion two things may happen now:
1. If price were to positively close above this channel, and retest 1.6 as support, we would be very interested in buying, ultimately targeting the 1.60871/1.61 area.
2. More selling could come into the market around current price (at the upper limit of the channel), and force this market back down to the aforementioned 4hr demand area, where we would patiently watch the lower timeframe price action for the next decision to be made.
• Buy orders: N/A (Predicative stop-loss orders seen at: N/A).
• Sell orders: N/A (Predicative stop-loss orders seen at: N/A).