Daily view: Daily action, however, shows that the recent four-day sell-off took out bids sitting around the1.5484 region, ending the week ended painting a daily indecision candle off the base of a daily at 1.5189-1.5345. This area, as you can probably see, also surrounds the weekly level mentioned above at 1.5235, so price may drive lower into the aforementioned daily demand this week before attempting to break higher from this zone. Near-term daily resistance now sits at 1.5484.
4hr view: Driving lower to the 4hr timeframe, we can see that during early trade on Friday, price attempted to extend higher from 1.5400, but only managed to reach highs of 1.5441 before tumbling lower. The move lower took out bids sitting at 1.5400 and drove below a 4hr coming in at 1.5342-1.5377, which was clearly enough to support a counter attack back up to 1.5400 into the close.
Now, from where current price is currently located on the 4hr timeframe it is very difficult to even guess which way the market will head today, let alone this week!
On the one hand, we have a 4hr pin-bar candle spearing 1.5400, which could encourage sellers into this market. On top of that, the majority of traders who attempted to fade the 4hr demand area on Friday were likely stopped out by the small spike seen beneath. Therefore, along with what we’re seeing on the weekly scale (see above) the path could be clear for further selling.
On the other hand though, the 4hr pin-bar candle may have been a consumption spike to rid offers around the psychological handle 1.5400, so price could potentially rally up to 4hr supply coming in at 1.5507-1.5482. This makes sense to us since let’s not forget where price is trading on the at the moment (see above).
As a result, our plan of attack will likely consist of waiting to see if either price closes above 1.5400 or below the 4hr demand. Should the former be seen, we’d then likely begin looking to enter long on the break/retest of 1.5400. If the latter, we’ll then look to trade the retest of this area, targeting another 4hr demand at 1.5256-1.5294. This target zone sits just above the aforementioned weekly level and also deep within current daily demand.
Levels to watch/ live orders:
• Buys: Watch for offers around 1.5400 to be consumed and then look to trade any retest seen at this number (confirmation required).
• Sells: Watch for bids around 1.5342-1.5377 to be consumed and then look to trade any retest seen at this area (confirmation required).