Daily view: Rolling a page lower to the , however, shows us that despite the recent drop in value, buying pressure was seen coming into the market during Friday’s session from a fresh daily demand at 1109.4-1122.7. From this area, bids were able to push prices back above the aforementioned weekly swap (support) level, creating an almost perfect fakeout scenario.
4hr view: As already mentioned above, unlike the rest of last week, Friday’s session was the only day. Price began this day well-bid taking out intraday 4hr resistance at 1127.6, which shortly after was retested as support twice (see black arrows) before climbing higher to consume offers around two 4hr supply zones at 1139.5-1133.0/1146.3-1139.8 (red arrows).
Taking into account the current location of price on the higher timeframe (see above) and the fact that offers are now likely weak overhead, Our team naturally favors the bulls this week. With that, here are some likely scenarios that may play out in the days to come:
• A third retest of 1127.6 could be seen. If this hurdle holds firm, a potential long entry from here may be possible, targeting the 4hr swap (supply) area at 1147.7-1144.5. Considering this level has already been stabbed twice, we’d advise waiting for lower timeframe confirming price action before risking capital to this idea.
• In the event that offers are indeed weak overhead, price could simply continue to appreciate during today’s trade and connect with the aforementioned 4hr swap (supply) area at 1147.7-1144.5. In this case we’ll remain flat due to the risk/reward being only a little over 1:0.
• Should 1127.6 give way this week, price will likely grind south down to 4hr demand at 1109.4-1116.1 (located deep within daily demand at 1109.4-1122.7). Now, even though we favor the bulls this week, we’re not one to pass up on an opportunity to trade. There could be, if price cleanly breaks below 1127.6 and retests this level as resistance, a short trade targeting 1117.2 – a few pips above the 4hr demand. Just to be on the safe side here though, we’d not sell without confirmation from the lower timeframes and only trade with 50% of our usual position.
Levels to watch/ live orders:
• Buys: 1127.6 Tentative – confirmation required (Stop loss: dependent on where one confirms this level).
• Sells: Watch for bids around 1127.6 to be consumed and then look to trade any retest seen at this number (confirmation required).