Recent events on 4hr timeframe reveal that there was clearly a strong ceiling of offers sitting around the 123.00 handle which managed to hold this market lower during yesterday’s trade. As a result, price is now currently seen teasing the lower limits of the recently broken 4hr demand area at 122.44-122.75 once again (located just above a daily swap area coming in at 122.40-121.73).
Initially, our team was bullish from this area, but given the recent spike below this zone seen around yesterday’s open, and the fact that the daily timeframe printed an indecision candle going into yesterday’s close 122.52, we feel that this market may drive south to connect up with the 122.00 handle today. It would be here that we’d begin looking for buys into this market for the following reasons:
1. A move down to 122.00 would essentially place price at the upper limits of a minor weekly swap area at 122.01-121.40 (see weekly chart).
2. Price would then be located extremely deep within the aforementioned daily swap area.
3. 122.00 is a number that has been heavily respected as resistance on two occasions in the past. The first was seen a little lower than 122.00 at 121.83 on the 07/12/14. This just showed how much supply was at this area at that time! More recently though, we saw price literally react to-the-pip at 122.01 on the 10/03/2015. This sent the market down a very cool 350 pips!
Waiting for lower timeframe confirming price action around the 122.00 number is highly recommended, since fakeouts tend to occur around psychological hurdles more often than not, and there is nothing worse than price stabbing your stop and bolting to your target.
Levels to watch/ live orders:
• Buys: 122.00 (Stop loss: dependent on where one confirms this number).
• Sells: Flat (Stop loss: N/A).
Initially, our team was bullish from this area, but given the recent spike below this zone seen around yesterday’s open, and the fact that the daily timeframe printed an indecision candle going into yesterday’s close 122.52, we feel that this market may drive south to connect up with the 122.00 handle today. It would be here that we’d begin looking for buys into this market for the following reasons:
1. A move down to 122.00 would essentially place price at the upper limits of a minor weekly swap area at 122.01-121.40 (see weekly chart).
2. Price would then be located extremely deep within the aforementioned daily swap area.
3. 122.00 is a number that has been heavily respected as resistance on two occasions in the past. The first was seen a little lower than 122.00 at 121.83 on the 07/12/14. This just showed how much supply was at this area at that time! More recently though, we saw price literally react to-the-pip at 122.01 on the 10/03/2015. This sent the market down a very cool 350 pips!
Waiting for lower timeframe confirming price action around the 122.00 number is highly recommended, since fakeouts tend to occur around psychological hurdles more often than not, and there is nothing worse than price stabbing your stop and bolting to your target.
Levels to watch/ live orders:
• Buys: 122.00 (Stop loss: dependent on where one confirms this number).
• Sells: Flat (Stop loss: N/A).
IC Markets is an online forex broker specialized in providing transparent trading solutions to both retail and institutional investors alike. We provide superior execution technology, lower spreads and unrivaled liquidity.