So, in view of the current structure and bearing in mind that today is the all-important nonfarm payrolls release, what’s likely in store for this pair? Well, we feel the 0.9700 resistance line will not hold well today. Of course, a bounce will likely be seen, but a reversal we believe is doubtful. The reason for why, apart from the clear direction being seen on the higher-timeframe picture right now (see above), is there’s little active supply seen above 0.9700 (supply consumption wicks 0.9766/0.9753/0.9733) until H4 supply coming in at 0.9796-0.9781 (positioned within the extremes of the daily supply mentioned above at 0.9787-0.9755). Therefore, should a close above and retest of 0.9700 be seen before the NFP shenanigans begin, followed by some sort of lower timeframe buy signal, we’d look to long this market targeting the aforementioned H4 supply. In regards to confirmation, this could be in the form of an engulf of supply and subsequent retest as demand, a break/retest of a or simply a collection of buying tails around a lower-timeframe support.
Levels to watch/live orders:
• Buys: Watch for price to close above 0.9700 and look to trade any retest seen thereafter (lower timeframe confirmation required).
• Sells: Flat (Stop loss: N/A).