Interesting P.A seen on the EUR traders...
Ok, taking it from the top this morning, we can see that weekly action has yet to register anything concrete following last week’s bearish selling wick seen within the weekly supply zone at 1.1533-1.1278. What we will say, however, is this area has managed to hold the single currency lower since May 2015, so the bulls will likely have their work cut out for them if they wish to push higher. Looking down to the daily picture, the EUR is seen trading within daily demand coming in at 1.1385-1.1332. Wednesday’s response from here was, as you can see, bullish, engulfing three prior daily bear candle bodies! Nevertheless, yesterday’s candle clawed back these gains and slammed the market right back where it started – the daily demand base!
Moving over to the H4 chart, the EUR, as anticipated, sold-off during the course of yesterday’s sessions. Price found some support around the 1.14 handle (likely due to high U.S. unemployment figures coming out), but was unable to stop the pair from driving down to lows of 1.1370 on the day.
In that price is now trading around Tuesday’s support formed from a 61.8% H4 Fibonacci line at 1.1368, would we consider a buy from here? In short, no. Granted, we are in daily demand, but let’s not forget that we’re also trading from weekly supply (see above) and have the 1.14 handle lurking just above as a potential area for strong offers to be hiding. Ultimately, we still feel this pair want’s to drive lower, so does that mean we look for a sell beyond the H4 Fibonacci support? Not for us since there’s H4 support just below at 1.1337. Where we would consider going short, nevertheless, is on the break below and (confirmed) retest of this H4 support. Here’s why:
1. 1.1337 marks the lower edge of the current daily demand, so a break below this H4 support would also mean a break below the daily zone.
2. Between 1.1337 and the H4 demand seen at 1.1256-1.1265, we see very little active demand. Also take note that this H4 demand sits within the confines of daily demand chalked in at 1.1215-1.1264, which is the next downside target on the daily timeframe!
In regard to looking for lower timeframe confirmation (as we mentioned before) it could be in the form of either an engulf of demand and subsequent retest, a break/retest of a trendline or simply a collection of selling wicks around a lower-timeframe resistance hurdle. Also one final point to consider is that we have core U.S. retail sales and PPI data due to be released later on – do take care during those times as technicals may likely take a back seat!
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: Watch for price to close below 1.1337 and look to trade any retest seen thereafter (lower timeframe confirmation required).
Moving over to the H4 chart, the EUR, as anticipated, sold-off during the course of yesterday’s sessions. Price found some support around the 1.14 handle (likely due to high U.S. unemployment figures coming out), but was unable to stop the pair from driving down to lows of 1.1370 on the day.
In that price is now trading around Tuesday’s support formed from a 61.8% H4 Fibonacci line at 1.1368, would we consider a buy from here? In short, no. Granted, we are in daily demand, but let’s not forget that we’re also trading from weekly supply (see above) and have the 1.14 handle lurking just above as a potential area for strong offers to be hiding. Ultimately, we still feel this pair want’s to drive lower, so does that mean we look for a sell beyond the H4 Fibonacci support? Not for us since there’s H4 support just below at 1.1337. Where we would consider going short, nevertheless, is on the break below and (confirmed) retest of this H4 support. Here’s why:
1. 1.1337 marks the lower edge of the current daily demand, so a break below this H4 support would also mean a break below the daily zone.
2. Between 1.1337 and the H4 demand seen at 1.1256-1.1265, we see very little active demand. Also take note that this H4 demand sits within the confines of daily demand chalked in at 1.1215-1.1264, which is the next downside target on the daily timeframe!
In regard to looking for lower timeframe confirmation (as we mentioned before) it could be in the form of either an engulf of demand and subsequent retest, a break/retest of a trendline or simply a collection of selling wicks around a lower-timeframe resistance hurdle. Also one final point to consider is that we have core U.S. retail sales and PPI data due to be released later on – do take care during those times as technicals may likely take a back seat!
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: Watch for price to close below 1.1337 and look to trade any retest seen thereafter (lower timeframe confirmation required).
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