Turning our attention to the H4 chart, Friday’s trading struck the 109.00 handle going into the London open, forcing this unit to close the week out just ahead of the 108.00 line. With this pair in a clear downtrend at the moment, is it wise to go fishing for long trades from here? Well, with a very impressive weekly demand lurking just below current price at 105.19-107.54, and a daily demand in play right now at 107.60-108.35, which boasts a reversal candle pattern (see above), we feel a bounce north could be on the horizon. That being the case, our plan of attack will consist of looking for lower timeframe long entries within the H4 green shaded zone (108.00/107.50). In between this area sits the lower half of the daily and also the top-side of the weekly demand base (see above for values), thus making it one awesome barrier for a bounce to be seen. The reason for requiring a lower timeframe buy setup to form (see the top of this article for confirmation techniques) prior to risking capital here is simply due to the pair being in a downtrend right now.
Levels to watch/live orders:
• Buys: 107.50/108.00 Tentative – confirmation required (Stop loss: dependent on where one confirms this area).
• Sells: Flat (Stop loss: N/A).