Daily Timeframe: Yesterday’s trading action reveals that active sellers came into the market just below a daily supply area (119.95-119.14) around the 118.82 mark. This took us a little by surprise as we felt prices would likely rally higher towards the aforementioned daily supply before selling off. It will be interesting to see what the 4hr timeframe has to report.
4hr Timeframe: The 4hr timeframe shows that the recent sell off originated from deep within a 4hr supply area at 118.84-118.52. This move took out the 118.00 handle and saw follow-through selling down towards a 4hr demand area seen at 116.91-117.22. From here, price rebounded strongly and forced price north to retest 118.00 as resistance.
Assuming that 118.00 can hold the market lower, we see very little stopping prices from dropping back down to the aforementioned 4hr demand area. As a result, we’re going to be watching lower-timeframe price action closely here today for any sign of selling confirmation. If a signal is spotted, we’ll jump onboard and try to ride price down towards 117.27. However, a break above 118.00 would likely prompt a rapid retest, which is something we’d be very interested in participating in since the path north appears to be clear up to 118.48, just below the aforementioned 4hr supply area.
Current buy/sell levels:
• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: watching for lower-timeframe confirmation around the 118.00 area (Predicative stop-loss orders seen at: dependent on where once confirms this level).