Now, before we get into potential trade setups for today, let’s run over the higher timeframe picture so that we know where we stand in the overall scheme of things. Up on the weekly chart, the current candle is trading within shouting distance of a weekly supply area carved from 1.0092-0.9928. Meanwhile, down in the pits of the , the buyers and sellers are seen battling for position around a daily coming in at 0.9900, bolstered by a daily resistance taken from the high 1.0092.
The two H4 supply areas marked at 0.9950-0.9934/ 0.9920-0.9899 remain a focal point for our team today. The upper zone is located within the aforementioned weekly supply area, whilst the lower area sits just beneath it. Nevertheless, the lower zone boasts a deep H4 88.6% Fib at 0.9906, a psychological number at 0.99 which let’s not forget also represents daily resistance (see above).
Our suggestions: The lower H4 supply area at 0.9920-0.9899 is attractive due to its converging structures and will very likely bounce price lower. Nevertheless, we feel the best area to look for shorts is the H4 supply seen just above it at 0.9950-0.9934, given its position on the (see above). One can only imagine how many traders are looking to short the lower H4 supply due to its confluence. As such, there are likely to be a truckload of stops above this barrier ripe for the taking!
With that being said, our team has placed a pending order to sell just below the upper H4 supply at 0.9931 with our stop set just above the area at 0.9954. It will be interesting to see how this pans out!