Consequent to the above, we can see that additional support was seen in this market from the daily scale coming in at 1088.2 (swap level). This barrier managed to hold prices higher for the entire week, which ended with price printing a nice looking pattern on Friday.
The 4hr timeframe action was intersecting last week. Following the aggressive sell-off and rebound from the aforementioned weekly Quasimodo , price formed a beautifully structured reversal pattern into the jaws of the daily swap (support) level mentioned above at 1088.2, which as you can see blasted higher to connect with a 4hr at 1105.6-1099.2 a few hours before the week’s close.
On the one hand, we know that the overall trend in this market is pointing south, on the other, however, it is clear that structural support is currently building strength on the higher timeframes (check above in bold). Therefore, if price can overcome any offers sitting within the current 4hr supply area this week, we feel there is a very good chance that this market could extend higher up to the 4hr positioned around the weekly swap level at 1130.1. With that, here are two possible avenues we may look to take this week:
1. Buy from the daily swap (support) level at 1088.2. Now, for this long to be permitted, we’d need to see the following take place… A deep drive into the current 4hr supply area (preferably a spike above it), whereupon price then drops back to pick up any unfilled buy orders left around 1088.2 (blue arrows). This way we can be pretty sure most of the supply at this barrier is consumed.
2. In the event that price closes above the current 4hr , we may look to try and trade any retest seen off this area.
In closing, the overall take-profit target for any trades taken from the above said areas will be 1127.9. Furthermore, waiting for lower timeframe confirmation is strongly advised here due to current trend direction.
Levels to watch/ live orders:
• Buys: 1088.2 Tentative – confirmation required (Stop loss: dependent on where one confirms this level) Watch for 1105.6-1099.2 to be consumed and then look to enter long on any retest seen (confirmation required).
• Sells: Flat (Stop loss: N/A).