Daily view: The shows that price came very close to connecting with a daily swap area at 122.40-121.73 towards the end of last week (price found mild support just above this zone at the previous weekly low 122.44), which, if you look back to weekly chart, you’ll see is effectively a key obstacle to a move towards the aforementioned minor weekly swap level positioned just below it.
4hr view: After price shook hands with the round number 123.00 on Friday, a clear battle between the buyers and sellers took place. It was only as we entered into the afternoon U.S session did we see price aggressively sell off into the 4hr demand area at 122.44-122.75 (located just above the aforementioned daily swap area).
Today’s opening number 122.93 saw this market gap north 31 pips from the aforementioned 4hr demand area, just missing the round number 123.00 by seven pips. At the time of writing this weekend gap is being filled, thus pushing price back down to 4hr demand.
With all of the above taken into consideration, where do we see this market moving today and possibly into the week? Well, the weekly chart indicates there is room for price to continue selling off, while the shows price is only a few pips away from shaking hands with a daily swap area (see above), so where does this leave us on the 4hr timeframe? From the buy side, we do not see any opportunity whatsoever. Even if price breaks above 123.00, the next objective to reach from here is only a mere thirty pips (123.32). A break below the current 4hr demand area, however, would be interesting. We say this simply because there is space below this area for price to move on the 4hr timeframe. The problem shorting on the break/retest here would of course be the fact that price would then be trading within the aforementioned daily swap zone. But with the by our side so to speak (remember there is room to move south), we would likely consider a short on the break of the current 4hr demand area, as long as a confirmed retest of this zone was seen.
Levels to watch/ live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: Flat (Stop loss: N/A).