Turning our attention to the , both demand (now supply) at 0.9851-0.9926 and support (now resistance) at 0.9822 were completely obliterated during yesterday’s assault. This, as you can see, leaves the runway clear down to test support extended from the low 0.9078 and the reversal zone (78.6% Fibonacci level at 0.9669/127.2% at 0.9651).
Steeping down one more level to the H4, it’s clear to see that the bulls did not make an appearance yesterday until crashing into psychological support 0.9700. Looking to buy from 0.9700, when both the weekly and show room to move lower is not something we’d stamp high probability. This is, in our opinion, likely profit taking we’re seeing here. The level we have our eye on currently is the daily support mentioned above since it converges beautifully with a buy zone (see above). This is a little worrying for us since we’re currently short the EUR/USD! Nevertheless, traders should keep an eye on this area today as it will likely bounce prices higher – we would recommend waiting for lower timeframe confirmation here since the buy zone is relatively small and likely prone to a fakeout. With regards to targets, our first port of call would be the daily coming in at 0.9822.
Levels to watch/live orders:
• Buys: 0.9651/0.9669 Tentative – confirmation required (Stop loss: dependent on where one confirms this area).
• Sells: Flat (Stop loss: N/A).