Kicking things off with a look at the weekly chart this morning, we can see that price extended last week’s bounce from the supply at 1.0092-0.9928 down to lows of 0.9728 yesterday. In the event that the bears remain in the driving seat here, the next barrier of interest falls in at 0.9581: a support level. Slipping down to the daily chart, yesterday’s bearish descent took out support at 0.9841 (now acting resistance), and now looks to be on course to connect with a support area coming in at 0.9648-0.9708.
Our suggestions: Even though the weekly chart suggests further selling may be on the cards, our desk has noted a particularly interesting H4 buy zone. Consisting of a H4 support level at 0.9713, a H4 78.6% Fib at 0.9716, a H4 trendline support taken from the low 0.9537 and the 0.97 handle, which is topped off by being housed within the top edge of the above mentioned daily support area. For that reason, we feel a bounce from this region will likely take place. However, knowing that we are effectively buying against weekly sellers here, it would be prudent to wait for at least a H4 bullish close to form prior to pulling the trigger.
Data points to consider: US ADP employment change at 12.15pm along with the decision and statement from the FOMC at 6pm GMT.
Levels to watch/live orders:
• Buys: 0.97/0.9716 area (H4 bullish close required, stop loss: ideally beyond the trigger candle).
• Sells: Flat (stop loss: N/A).
Our suggestions: Even though the weekly chart suggests further selling may be on the cards, our desk has noted a particularly interesting H4 buy zone. Consisting of a H4 support level at 0.9713, a H4 78.6% Fib at 0.9716, a H4 trendline support taken from the low 0.9537 and the 0.97 handle, which is topped off by being housed within the top edge of the above mentioned daily support area. For that reason, we feel a bounce from this region will likely take place. However, knowing that we are effectively buying against weekly sellers here, it would be prudent to wait for at least a H4 bullish close to form prior to pulling the trigger.
Data points to consider: US ADP employment change at 12.15pm along with the decision and statement from the FOMC at 6pm GMT.
Levels to watch/live orders:
• Buys: 0.97/0.9716 area (H4 bullish close required, stop loss: ideally beyond the trigger candle).
• Sells: Flat (stop loss: N/A).
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