Daily view: From this angle, we can see that price has now firmly shook hands with the daily supply area seen at 122.01-121.34, which, if you look back to the , you’ll notice that this zone surrounds the aforementioned weekly Quasimodo .
4hr view: The recent surge in buying yesterday took out both the round number 121.00, and a 4hr supply area seen at 121.39-121.28.
Buy stops have likely been triggered above the aforementioned 4hr . This, in turn, has likely cleared the path north up to extreme 4hr seen at 121.83 – very close to the weekly Quasimodo mentioned above, and located extremely deep within the aforementioned daily supply area. The reason we believe the path north to be clear up to 4hr simply comes from looking to the left. We invite you to scroll back to mid-March – just above the current 4hr supply area you can see what we like to call ‘supply consumption wicks’ at 121.50/121.55/121.66. These wicks indicate supply/sell orders have likely already been consumed as price continued to trade south, thus once/if price action came close to this zone again, it’s likely to be a relatively weak area of resistance.
So, with price action on the 4hr timeframe suggesting buying, and both the weekly and daily timeframes indicating selling may be the best bet (see above), where do we go from here? Well, if the market retraces back down to 121.00 or even the 4hr demand area seen below it at 120.72-120.89, we’ll then begin watching the lower timeframes for buying strength. If a buy signal is spotted and has ‘buy me’ written all over it, we’ll likely take a long here with a smaller than usual position which will be continually monitored by our team. However, in the event that the 4hr demand area at 120.72-120.89 is engulfed, the river south should be ‘ripple free’ so to speak down to at least the 4hr swap level 120.26. Despite this, for us to be given the ‘green light’ to short following a close lower, we would need to see not only a strong retest of this area as supply, but also supporting lower timeframe strength i.e. a , and engulf of demand etc…
Levels to watch/ live orders:
• Buys: 121.00 (Predicative stop-loss orders seen at: dependent on where one confirms this level) 120.72-120.89 (Predicative stop-loss orders seen at: 120.68).
• Sells: Flat (Predicative stop-loss orders seen at: N/A).