This recent move has chiseled out the beginnings of a nice looking which completes just above a 4hr supply area at 1.5731-1.5690 at 1.5739. This – coupled with the following points makes this one heavily confluent sell zone:
1. Located very close to the weekly swap level at 1.5733.
2. Positioned nicely within daily supply coming in at 1.5787-1.5687.
3. Round number resistance seen at 1.5700.
Given the points made above, our team has decided to place a pending sell order at 1.5686 and a stop just above the high 1.5774 at 1.5778. Even with this relatively large stop, risk/reward is still favorable as we intend to follow Scott Carney’s trade management rules here (0.382 – move stop to breakeven and possibly take partial profits/0.618 take full profits).
Before this happens though, we’re obviously expecting this pair to rally today in order to reach our aforementioned sell zone. As such, we would consider buying this market if price retested the 1.5600 barrier as support, targeting the underside of the aforementioned 4hr supply area 1.5683 (as per black arrows). Waiting for lower timeframe buying confirmation here is highly recommended, as from our experience, round numbers are prone to fakeouts.
Levels to watch/ live orders:
• Buys: 1.5600 (Stop loss: dependent on where one confirms this level).
• Sells: 1.5686 (Stop loss: 1.5778).