Daily Timeframe: The clearly shows that price has firmly closed above a daily Quasimodo at 115.911-115.021, indicating that the path north is likely clear up to a major Quasimodo at 117.120 (located deep within the aforementioned weekly supply area). Therefore, as per this timeframe more buying could indeed be seen up to this level before serious sellers enter the market. Let’s take a look at what the 4hr timeframe is saying.
4hr Timeframe: The 4hr timeframe shows that a push above 116 was indeed seen, which was later essentially retested as support (116.042) around the close.
Assuming that the buyers can hold above 116, we see very little reason why prices cannot trade to 117, which is if you remember only 12 or so pips below the daily Quasimodo mentioned above. With that being said, we would not consider buying here since price could just as easily break lower, as we mustn’t forget that larger sellers could indeed enter the market here around the current weekly supply area mentioned above. However, we would be very interested in selling around 117 (116.946) but only with lower timeframe confirmation mind you, since psychological levels are prone to fakeouts.
To wrap up, we see this pair at a level where a decision needs to be made. Take a look on the 4hr chart to see what we believe price could potentially do this week.
• Buy orders: N/A (Predicative stop-loss orders seen at: N/A).
• Sell orders: 116.946 (Predicative stop-loss orders seen at: Stops will be dependent upon which confirmation signal you use here).