Daily Timeframe: Little price movement on the has resulted in the market forming what looks to be a continuation flag. Overall though, the pair remains trapped between a small daily supply area seen just above at 119.95-119.14, and a daily demand area seen below at 115.55-116.38. It will be interesting to see what the 4hr timeframe has to say about this…
4hr Timeframe: Monday’s open (116.87) saw the market break below the 4hr range (118.84-118.52/116.91-117.22) that has confined price action since 20/01/15. In breaking below here, a second, albeit smaller 4hr range (116.86/117.68) formed (marked in yellow).
This has in effect made it relatively easy to read the price on this pair. A break above and retest of the small 4hr range high would likely attract buying interest up to the upper limits of the larger 4hr range. Similarly, a break below and retest of the small 4hr range low (for levels see above) would likely motivate the sellers to push this market south down towards a 4hr demand area coming in at 115.55-116.06 as per the blue arrows.
With the above in mind, buying the retest is very high probability since we are trading above a higher-timeframe weekly swap level at present (see above). Selling on the other hand is something we would need to be careful of since shorting here could potentially put you in the position of selling into higher-timeframe support (see weekly and daily above), so this trade would require constant monitoring, along with very strict trade management rules.
Current buy/sell levels:
• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).