Weekly view – The shows that price rallied for three consecutive weeks, consequently taking out a weekly supply area at 124.13-122.22, and marrying up with a weekly swap level seen at 125.44.
Daily view: The small break above the daily at 125.69-124.62 on Friday clearly triggered selling in the market during yesterday’s session. In the event that further selling is seen from here today, price will likely tackle the top side of daily demand seen at 123.74-124.07.
4hr view: The recent descent on this pair, as you can see, took out both the 125.50 level and the round number 125.00, then went on to test a 4hr demand area seen at 124.21-124.53.
Given where price is located on the higher timeframes (see above) at the moment, we would not really be comfortable trading long from the aforementioned 4hr area of demand. An area we do have our eye on for buys, however, is seen a little below it marked in green at 123.74-123.95, which lines up beautifully with the aforementioned daily demand area.
Let’s think about this for a moment. Traders looking to trade long from either the current 4hr demand area or the round number 124.00 will have their stops set just below. These stops provide liquidity for buying (sell stops). Would it not make logical sense for pro money to sell into this market today and take these stops out? We believe so. And the logical place for price to reverse in our opinion is the 4hr buy area we just mentioned above. As such, we’re going to place a pending buy order at 123.94, with a stop set at 123.44.
You may be thinking at this point, why are they attempting to buy against potential weekly sellers from the weekly swap level 125.44??!! Look at the weekly chart again; can you see the recently broken supply area at 124.13-122.22? This will likely provide structural support to the market at least that is what we’re hoping for.
Levels to watch/ live orders:
• Buys: 123.94 (Predicative stop-loss orders seen at: 123.44).
• Sells: Flat (Predicative stop-loss orders seen at: N/A).