The higher-timeframe picture resembles the following:
Weekly TF: Prices are stalling after hitting the awesome-looking weekly supply area at 1.10522-1.09996. Considering just the for the moment, we still believe lower prices could be seen, since there’s very little stopping the sellers from challenging the weekly demand area below at 1.05715-1.07008.
Daily TF: A stunning to-the-pip reaction has been seen off of the daily supply area at 1.09967-1.09401. Taking into account where price is located on the (see above), we very much expect prices to drop from here back down to at least the daily S/R flip level at 1.08277.
The 4hr timeframe shows that selling pressure dried up when the market tested the 4hr demand area at 1.08553-1.08681, which in turn saw a beautiful to-the-pip reaction, triggering our P.A confirmation buy level located just above at 1.08715. The subsequent rebound rally produced a potential close, but the only way to find out if the buying was legit, and not just traders covering their short positions, will be to see a close above the round number 0.9. This would give us the confidence to allocate a pending buy order in place of the P.A confirmation buy level.
Taking all of the above into consideration, current price is trading around impressive higher-timeframe supply areas (Weekly: 1.10522-1.09996, Daily: 1.09967-1.09401) at the moment, so expecting a huge rally higher at the moment may be a little too ambitious for the time being.
Pending/P.A confirmation levels:
• No pending buy orders (Green line) are seen in the current market environment.
• The P.A confirmation buy level (Red line) set just above 4hr demand (1.08553-1.08681) at 1.08715 is now active. For this area to be confirmed the buyers must close price above the round number 0.9, only then will we consider setting a pending buy order in the market.
• Pending sell orders (Green line) are seen just below a 4hr supply area (1.10388-1.10163) at 1.10127. This area remains fresh, and likely contains unfilled sell orders indicating a bounce south at the very least will be seen if/when price reaches this area.
• P.A confirmation sell levels (Red line) are seen just below 4hr supply (1.09967-1.09807) at 1.09777. The reasoning behind not setting a pending sell order here was simply because price could rally all the way back up to (in our opinion) a beautifully located 4hr supply area at 1.10388-1.10163.
• Areas to watch for buy orders: P.O: No pending buy orders are seen in the current market environment. P.A.C: 1.08715 (Active-awaiting confirmation) (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).
• Areas to watch for sell orders: P.O: 1.10127 (SL: 1.10440 TP: Dependent on how price approaches) P.A.C: 1.09777 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).