Daily Timeframe: The shows that the market closed (1.56656) within a daily decision-point demand area at 1.55602-1.56802 (located within the aforementioned weekly demand area). We can clearly see buying interest did indeed enter that market on Friday – check out the obvious buying tail at 1.55917. Nonetheless, the only way to find out if the buying here was legit, and not just traders short covering would be a follow-through to the upside early on this week, preferably closing above 1.57166 (weekly resistance flip level). As a consequence this move would potentially clear the path north up to a daily supply area coming in at 1.59438-1.58338. Let’s take a look on the 4hr timeframe to see what it can offer us.
4hr Timeframe: The 4hr timeframe shows that towards the end of the week, buyers and sellers were seen trading in between the round-number level 1.56, and a combined 4hr supply/round-number area at 1.57208-1.56927/1.57 (this area surrounds the weekly resistance flip level at 1.57166).
To answer the question posed in the analysis regarding whether we should be looking for buying opportunities or not, the simple answer to this is ‘yes’ in our opinion. Be that as it may, we do not recommend buying the pound right away. A break above the aforementioned 4hr supply/round-number area would be required beforehand, which would potentially give us confirmed direction north on this timeframe up to at least a 4hr decision-point supply area coming in at 1.57804-1.57578.
Also we must bear in mind that the 4hr supply/round-number area has extra significance since it encapsulates the weekly resistance flip level at 1.57166, so a break above here could effectively be an early signal that prices will eventually rally up to the daily supply area mentioned above at 1.59438-1.58338.
With all of the above taken into consideration we are going to remain flat on this pair at this point in time, and see how price action unfolds today and even possibly tomorrow.
• Buy orders: N/A (Predicative stop-loss orders seen at: N/A).
• Sell orders: N/A (Predicative stop-loss orders seen at: N/A).