Looking to long the 110.21-110.40 neighborhood...
Weekly gain/loss: - 43 pips
Weekly closing price: 110.69
From the weekly timeframe it’s clear to see that the pair sustained further losses last week, registering its third weekly bearish close. Technically speaking, the market looks as though it could continue to press lower until we reach the small demand base seen at 108.13-108.95.
Zooming in and looking at the daily picture shows us that price concluded the week marginally closing beyond support at 110.76. In theory, this move could have potentially cleared the river south down to a Quasimodo support logged at 109.11, which happens to unite closely with a trendline support etched from the low 108.13.
A brief look at recent dealings on the H4 chart reveals that the bulls eventually threw in the towel around the 111 handle, allowing the unit to test, and ultimately engulf, June’s opening level at 110.83. What’s also notable from a technical perspective here is the two AB=CD bullish patterns in the making (black/orange arrows). Both terminating around the top edge of a small demand base at 110.21-110.40, this area is, in our opinion, stable enough to bounce price this week since it was formed on the break of a Quasimodo left shoulder at 110.27. In addition to the Harmonics, we also like the fact that the mid-level number 110.50 is positioned directly above. A great deal of traders look to buy these levels and place stops a few pips below. By driving through this level, sell stops will be filled from both buyers looking to long and sellers looking to play the breakout, and therefore provide liquidity for the big boys to buy.
Understandably, the only grumble we have buying from the small H4 demand is the higher-timeframe picture, which suggests further selling may be on the horizon (see above).
Our suggestions: Watch for H4 price to test demand at 110.21-110.40 and, depending on the time of day, look to buy at market with stops positioned just below the said demand at 110.19. Ideally, we’d be looking to target June’s opening level at 110.83 to take partial profits. We would also adivse moving stops to breakeven as soon as a H4 close is registered above 110.50, since let’s not forget that we would effectively be going against higher-timeframe flow here!
Data points to consider: No high-impacting news events scheduled on the docket today.
Levels to watch/live orders:
• Buys: 110.21-110.40 (stop loss: 110.19).
• Sells: Flat (stop loss: N/A).
Weekly closing price: 110.69
From the weekly timeframe it’s clear to see that the pair sustained further losses last week, registering its third weekly bearish close. Technically speaking, the market looks as though it could continue to press lower until we reach the small demand base seen at 108.13-108.95.
Zooming in and looking at the daily picture shows us that price concluded the week marginally closing beyond support at 110.76. In theory, this move could have potentially cleared the river south down to a Quasimodo support logged at 109.11, which happens to unite closely with a trendline support etched from the low 108.13.
A brief look at recent dealings on the H4 chart reveals that the bulls eventually threw in the towel around the 111 handle, allowing the unit to test, and ultimately engulf, June’s opening level at 110.83. What’s also notable from a technical perspective here is the two AB=CD bullish patterns in the making (black/orange arrows). Both terminating around the top edge of a small demand base at 110.21-110.40, this area is, in our opinion, stable enough to bounce price this week since it was formed on the break of a Quasimodo left shoulder at 110.27. In addition to the Harmonics, we also like the fact that the mid-level number 110.50 is positioned directly above. A great deal of traders look to buy these levels and place stops a few pips below. By driving through this level, sell stops will be filled from both buyers looking to long and sellers looking to play the breakout, and therefore provide liquidity for the big boys to buy.
Understandably, the only grumble we have buying from the small H4 demand is the higher-timeframe picture, which suggests further selling may be on the horizon (see above).
Our suggestions: Watch for H4 price to test demand at 110.21-110.40 and, depending on the time of day, look to buy at market with stops positioned just below the said demand at 110.19. Ideally, we’d be looking to target June’s opening level at 110.83 to take partial profits. We would also adivse moving stops to breakeven as soon as a H4 close is registered above 110.50, since let’s not forget that we would effectively be going against higher-timeframe flow here!
Data points to consider: No high-impacting news events scheduled on the docket today.
Levels to watch/live orders:
• Buys: 110.21-110.40 (stop loss: 110.19).
• Sells: Flat (stop loss: N/A).
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