Daily Timeframe: The gap below daily demand at 1.62510-1.63401 seen at the beginning of the week likely signals a continuation move down to around a fantastic-looking area of daily support at 1.58992 (neatly located within the aforementioned weekly demand area), since looking to the left of current price, most of the daily demand zones appear to have already been consumed. However, active buyers seem to be coming into the market around the 1.60506 level (as already mentioned on the weekly-timeframe analysis), which has brought price up to a daily demand flip area at 1.62510-1.63401. This could very well be pro money at work here, rallying price higher in order to entice buyers into the market, only later to sell into them, only time will tell though.
4hr Timeframe: Things are becoming really interesting between the ‘normally’ correlated EUR/USD and GBP/USD . Notice with the pound higher prices are being seen on the just above weekly demand at 1.58533-1.60157, and on the Euro price resembles the same structure (take a look on the weekly chart of the EUR/USD ). However, once we zoom down to the pound on the , price is, as already mentioned trading around a daily demand flip area (supply) at 1.62510-1.63401, while on the Euro ; price is trading around a notable daily demand area at 1.27541-1.28676, interesting!
Regarding the pound on the 4hr timeframe on the pound, we have removed our pending sell order set just below a 4hr supply (1.63393-1.62791) at 1.62667. Here’s why: If you recall both the Euro and the Pound are seeing interest just above their respective weekly demand areas (1.26591-1.28010/1.58533-1.60157) , and we already have a long position open on the Euro at 1.28936, so selling would be effectively hedging our position here. Granted, the Pound is currently at a daily demand flip area (supply) at 1.62510-1.63401, but as most already know the higher timeframes usually take precedence (both pairs trading around notable weekly demand areas – for the levels, see above), and we totally agree with this. So, regarding the pound, we’re expecting higher prices to eventually be seen sometime soon. We have placed a price action confirmation buy level just above the round number 1.62 at 1.62100, in an attempt to play the retest, we have not set a pending buy order here simply because this level could see a deep test/spike through it, hence buying confirmation is required.
Pending orders/Price action confirmation levels:
• Areas to watch for buy orders: Pending orders: 1.60112 (Stop loss: 1.59586 Take profit levels(s): Dependent on how price approaches) Price action confirmation levels: 1.62100 (Stop loss: Dependent on price action after the level has been confirmed, Take profit levels(s): Dependent on approaching price action after the level has been confirmed).
• Areas to watch for sell orders: Pending orders: No pending sell orders are seen in the current market environment. Price action confirmation levels: No price action confirmation sell levels are seen in the current market environment.