Daily timeframe: The major resistance flip level seen on the at 1.62591 resembles a drop-base-rally demand area on the at 1.62510-1.63401; well we should now really refer to it as a daily demand flip area. Price has, in our opinion now filled the previous weekend gap (1.62317/1.62791) resulting in price closing the week out (1.62636) within the aforementioned daily demand flip area.
A break above this area could likely force prices up to the next area of interest at 1.64589-1.64949 (another daily demand flip area). Conversely, if a reaction is seen here, which should really be the case considering the historical significance of this area seen on the , prices could very well drop down to a dally at 1.58992, which is located deep within a weekly demand area at 1.58533-1.60157.
4hr Timeframe: Considering both the weekly and daily timeframes are trading around supply areas (1.62591/1.62510-1.63401) at the moment, we naturally expect lower prices this week.
However, think about this for a moment. The Euro is currently trading very near to weekly demand at 1.26591-1.28010, and also trading out of daily demand at 1.27541-1.28676 where higher prices are expected to be seen this week.
Can anyone see the problem here? For two pairs that generally move in tandem with each other, both pairs are producing conflicting signals, meaning one has to give in! With positive price action being seen on the Euro 4hr timeframe presently, and the 4hr timeframe on the British pound showing little interest around the 4hr supply area at 1.63393-1.62791, we believe higher prices will be eventually seen on the pound, forcing price back into correlation with the Euro . Our price action confirmation buy level set just above the round number 1.62 at 1.62100 was triggered on Friday. The buyers need to prove this level is valid for buying by breaking above the aforementioned 4hr supply area, only then will we consider setting a pending buy order awaiting a possible return.
The above analysis is only ONE opinion and id definitely open to debate!