On the other side of the field, the buyers and sellers on the are seen battling for position at the underside of supply coming in at 1270.8-1257.5. This is effectively the third visit to this zone, which may end in price driving above this area to connect with resistance lurking at 1283.4 (positioned within the above said weekly supply).
With the higher-timeframe picture in mind, here is what we see on the H4 chart:
• Price defending resistance coming in at 1256.2 – essentially the lower edge of daily supply at 1257.5.
• A relatively nice-looking Quasimodo positioned just above the current resistance sitting at 1259.7.
• Points one (1266.7) and two (1262.6) show what we believe to be consumption wicks i.e. little active supply left within this region.
Therefore, given the relatively soft response seen from the current H4 and very little of interest above the H4 Quasimodo resistance at 1259.7, we’ll be looking to short 1259.7 today as this remains the only fresh area. Be that as it may, we would not feel comfortable selling here without some sort of lower timeframe confirmation (a break/retest of demand, a break/retest or even simply a collection of selling wicks around a lower timeframe resistance), since let’s not forget that the weekly chart shows room for price to rally north up to the aforementioned weekly supply. The first take-profit target from 1259.7 will be dependent upon the approach to our sell line.
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 1259.7 Tentative – confirmation required (Stop loss: dependent on where one confirms this level).