Branching lower to the , Friday’s session was the only day this pair has seen over the past two weeks, consequently creating an inside candle pattern. This signal, however, closed directly under the recently broken weekly resistance 113.17, so buying right now may not be the best path to take!
Turning our attention to the H4 chart, we can see that buying pressure began coming in this market on Thursday from psychological support 111.00. The week ended with price painting a selling wick within a small supply seen at 113.16-113.51 (surrounds the weekly at 113.17).
In view of both the weekly and showing room for this market to continue dropping lower this week (see above), and the fact that price is now hugging the underside of weekly resistance (see above), selling this pair is the more favored approach this week. However, shorting at the open is not something we’ll be getting involved in for the simple reason that psychological support 113.00 is lurking just below! Ultimately, what we’d like to see today is a close below this number and subsequent retest along with a lower timeframe setup. This will allow us to jump in short targeting at least psychological support 112.00, and possibly much lower as we would look to hang on to this position until the weekly support mentioned above at 110.09.
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: Watch for bids to be consumed around 113.00 and look to trade any retest seen thereafter (lower timeframe confirmation required).