Daily view: From the pits of the daily scale, we can see that the 600-pip sell-off spike seen on the weekly scale took place during one day’s trade – absolutely incredible! From Tuesday onwards, nonetheless, the market spent the week recouping its losses by pressing higher, forcing price to eventually wrap up the trade mid-range between a daily swap (demand) zone at 120.49-119.98, and a daily swap (supply) area at 122.15-122.86.
4hr view: For those who read our previous report http://blog.icmarkets.com/friday-28th-august-daily-technical-outlook-and-review/ you may recall us mentioning to keep an eye on the 4hr swap (support) level at 120.66 for a potential intraday bounce north on Friday. As we can all see, this played out perfectly and came within a small fraction of a pip of missing our take-profit level 121.73. Well done to any of our followers who managed to lock in some green pips from this move!
In view of price currently trading just below 4hr supply at 122.35-121.82, where do we see this market heading today/this week? Well, considering that the current 4hr area not only boasts a 61.8% Fibonacci resistance at 121.76/round-number resistance at 121.00, but also converges nicely with the underside of the aforementioned daily swap (supply) area at 122.15, we certainly have a bias short-term. However, although price could effectively bounce south from here today, it may continue heading higher this week due to where price is presently located on the (see above).
Therefore, to sum up, our team’s prime focus today will be on looking for (lower timeframe) confirmed short trades within the current 4hr . Should all go to plan, partial profits will quickly be taken within 121.19-121.39, followed closely by the 121.00/120.66 region. So all in all not great risk/reward, but depending on how high one is able to enter within the current 4hr supply, it could still yield 2:0 plus.
Levels to watch/ live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 122.35-121.82 Tentative – confirmation required (Stop loss: 122.55).