Potential scenario on the EUR/USD...
EUR/USD prices are little changed this morning. As such, weekly flow remains loitering within the walls of a major supply zone drawn from 1.1533-1.1278 that has capped upside since May 2015. Daily action on the other hand, shows that the major connected with the top edge of a support area drawn from 1.1327-1.1253 during yesterday’s trading, and chalked up a clear-cut indecision candle.
Having seen the daily candles recently challenge a support area, the likelihood of H4 price retesting the resistance area at 1.1372-1.1390 today is high. In addition to this, with the weekly chart suggesting that this market may continue to push lower, a trade from this H4 area may still be worthy of attention, even though we’re bouncing off a daily zone.
Our suggestions: Given daily bulls may come into the picture today; this could force H4 flow to fake above the resistance area and tag in offers positioned around the 1.14 handle lurking above. Therefore, we would not recommend placing limit orders around the zone.
In light of the circumstances, we would only trade this market short if H4 price whipsawed above 1.1372-1.1390, tapped 1.14, and then closed back within the said area (a pin-bar formation). This move would trigger stops/breakout buyers’ orders lurking above 1.1372-1.1390 and likely provide the big boys enough liquidity to short from 1.14, which is what we want to be a part of!
Data points to consider: US ADP non-farm employment change at 1.15pm, US Weekly unemployment claims and US trade balance figures at 1.30pm, US ISM non-manufacturing PMI and FOMC member Powell speaks at 3pm GMT+1.
Having seen the daily candles recently challenge a support area, the likelihood of H4 price retesting the resistance area at 1.1372-1.1390 today is high. In addition to this, with the weekly chart suggesting that this market may continue to push lower, a trade from this H4 area may still be worthy of attention, even though we’re bouncing off a daily zone.
Our suggestions: Given daily bulls may come into the picture today; this could force H4 flow to fake above the resistance area and tag in offers positioned around the 1.14 handle lurking above. Therefore, we would not recommend placing limit orders around the zone.
In light of the circumstances, we would only trade this market short if H4 price whipsawed above 1.1372-1.1390, tapped 1.14, and then closed back within the said area (a pin-bar formation). This move would trigger stops/breakout buyers’ orders lurking above 1.1372-1.1390 and likely provide the big boys enough liquidity to short from 1.14, which is what we want to be a part of!
Data points to consider: US ADP non-farm employment change at 1.15pm, US Weekly unemployment claims and US trade balance figures at 1.30pm, US ISM non-manufacturing PMI and FOMC member Powell speaks at 3pm GMT+1.
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