A break above the weekly supply area at 105.432-104.065 was seen last week, potentially clearing the path north up to weekly supply at 110.652-108.123. However, before we all start putting in our buy orders, a decline in value may be seen back down to the weekly R/S flip level support at 101.206, since pro money may not have the required liquidity to push prices higher just yet.
From Wednesday onwards price was seen dancing around the lower base of a huge daily supply area at 106.946-105.083. Now cast your minds back to the analysis, a break above weekly supply (levels above) was seen, this break could have been a fakeout into the aforementioned daily supply area. This would have accumulated a lot of buy orders for pro money to sell into here (Stops from traders attempting to fade the weekly supply area, and also the breakout buyers’ buy orders). If selling is seen this week, active buyers are expected around the daily demand area at 103.544-103.911.
Considering where price is currently located on the higher timeframes (Weekly supply: 105.432-104.065, Daily supply: 106.946-105.083), we are naturally expecting lower prices sometime this week. Our pending buy order set at 104.954 was stopped out within a pip or so, the spike/tail which stopped us out is very important to us (marked with a blue arrow at 104.674). This tail likely consumed a lot of buyers, including us, potentially signaling a continuation move down to at least the 4hr R/S flip level support at 104.264.
Although we expect lower prices, we must be prepared for a short rally higher beforehand, since pro money may not have the liquidity to push prices south just yet. An area that catches our eye is the QM level marked in pink at 105.301, even though we expect a reaction here, we are still setting a P.A confirmation sell level just below at 105.262, simply because placing a stop-loss order above the high 105.696 would be too far from a risk/reward perspective.
Pending orders/P.A confirmation levels:
• Areas to watch for buy orders: P.O: No pending buy orders are seen in the current market environment P.A.C: No P.A confirmation buy levels are seen in the current market environment.
• Areas to watch for sell orders: P.O: No pending sell orders are seen in the current market environment. P.A.C: 105.262 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).