Weekly view: Following last week’s rally seen from weekly demand at 118.22-119.40, price has now crossed swords with a long-term weekly resistance level coming in at 121.76.
Daily view: The daily timeframe shows that price action formed a bearish daily pin-bar candle within the confines of a daily supply area seen at 122.01-121.34 (surrounds the aforementioned long-term weekly resistance level). 4hr view: Yesterday’s sessions saw the 4hr chart form a demand area at 121.42-121.56. This zone may not look much at first glance, but if you scroll back to the left, you’ll see that the push north engulfed several highs, thus making it a key area for us today.
Given that resistance is being seen both on the weekly and daily timeframes (see above) at the moment, it’s quite possible that this market will eventually sell off. Nonetheless, before this takes place, price will need to engulf the aforementioned 4hr demand area. The engulf would be our cue so to speak to begin watching for price to retest this area of demand as supply for a potential short down to at least 121.00. The reason for why we believe price could drop this far is simply because we see price has already spiked (121.31 pink circle) the 4hr swap level at 121.32, thus potentially weakening any buying strength here.
Although our team believes a sell off will ensue shortly, we are also prepared for the possibility that price may rally north to tag the 4hr resistance level above at 121.83 beforehand – an absolutely fantastic area to be looking for lower timeframe confirmed shorts!
Levels to watch/ live orders:
• Buys: Flat (Predicative stop-loss orders seen at: N/A). • Sells: 121.83 [Tentative – confirmation required here to avoid the possibility of a fakeout] (Predicative stop-loss orders seen at: dependent on where one finds confirmation).
Comments
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ICmarkets
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Hi KT,
Nice, I hope this trade works out... Are you not concerned that price is currently trading at higher timeframe supply?
ICmarkets
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HAHAH obviously not as price hit its target. Just realized, well done, fantastic trade!