pair saw a sharp increase in value yesterday on the back of positive U.S. data. This, as is shown on the H4 chart, dragged price back up to retest the 114.00 figure, which is where the market settled into the close 113.97. Due to this level also boasting a clear weekly resistance barrier at 114.12 and a deep 78.6% Fibonacci level at 114.05, this is, at least technically, a sturdy platform in which to be looking for shorts today. Despite this, the drive into this zone was extremely violent and could lead to a continuation move north up to H4 supply at 115.19-114.85 (converges beautifully with a H4 Harmonic AB=CD bearish pattern
With the above in mind, here is what we have jotted down so far:
• Watch the lower timeframe action around the 114.00 region today for a possible short trade, targeting H4 demand drawn from 112.15-112.60.
• If 114.00 fails to hold, we’ll then be eyeing the H4 supply at 115.19-114.85 for a confirmed shorting opportunity. This area held price beautifully back on the 16th Feb, following a fakeout above the aforementioned weekly resistance, so there is a good chance that this process may repeat itself.