In the event that this breakout is indeed genuine, there may be a potentially humongous trade opportunity setting up. Our rationale behind this idea comes from the following:
• Weekly buyers may still be in the market from the weekly Quasimodo at 1074.6.
• The daily swap (support) level at 1088.2 is also providing extra support in this market.
• Space seen above the current 4hr range up to 4hr supply area coming in at 1134.5-1128.9 (conveniently positioned around the weekly swap level at 1130.1).
Therefore, should the buyers be able to hold this market above the recently broken 4hr supply barrier, there may be a long opportunity if corresponding lower timeframe confirmation is also seen. The reasons for requiring confirmation at this area is simply due to not knowing whether this recently broken supply will hold as demand, and also being unable to tell if price will fakeout lower before driving higher. Too many times we have seen traders pick a correct area but are taken out on a small fakeout spike! Nothing is more frustrating!
The target for this trade is simply the 4hr supply area mentioned above at 1134.5-1128.9. I t will be interesting to see how this plays out.
Levels to watch/ live orders:
• Buys: 1105.6-1099.2 Tentative – confirmation required (Stop loss: dependent on where one finds confirmation in this area).
• Sells: Flat (Stop loss: N/A).