The charts levels and zones will be color coded for the benefit of readers as follows:
Weekly TF = Black. Daily TF = Gold. 4hr TF = Brown
A quick look at what recent price action shows us on this timeframe. Price has consumed more sellers within weekly supply at 1.42445 – 1.38589. This could be because one of two things or even both going on here:
- Long-term trend traders who were long the market in the current uptrend may think this is a good opportunity to unload some of their positions and begin taking profit.
- This could be Pro money sellers loading their first shorts into the market.
Look at that wick completely clearing sellers from daily supply at 1.39669 – 1.39317, this wick made a high of 1.39909! Another 10 pips and price would have been trading at the big figure 1.40000. What does this wick portray? It tells traders this is a strong area of supply where more sellers are likely to be waiting with their unfilled orders. One can imagine the emotional disappointment caused by traders missing their entry by a few pips as price selfishly turns just before the entry level.
Near-term demand at the round number 1.39000, coupled with the previous monthly high at 1.39060 saw a small reaction, but nothing that would have been worth trading.
The demand area marked with an x at 1.38709 – 1.38798 has now been completely consumed; remember in the last analysis, it was reported to trade this area with caution as the origin normally provides the best reaction.
Next demand on the hit list for the sellers is at 1.38122 – 1.38295 which is also the previous weekly low at 1.38122. Be that as it may, we are still in weekly supply (levels above) and higher timeframes normally supersedes the lower, so be aware fellow traders!
Could this bearish momentum be the start of a long-term trend change, or are we still in for higher prices? As the sellers have been cleared out at daily supply above (levels above) price most certainly can rally higher. Time will tell as there are yet some strong demand areas to be consumed before any type of downtrend commences.
- Areas to watch for buy orders: 1.38122 – 1.38295
- Areas to watch for sell orders: 1.40000
- Most likely scenario: Price will likely begin retracing here, seeing some short-term profit taking. A test of the demand at 1.38122 – 1.38295 is likely to happen before a visit to the big figure 1.40000.
The pound has been very sluggish these past 2 days, technically there’s not much to add that was not said in the last analysis, a reminder will not hurt though.
Price is currently deep within daily supply at 1.70372 – 1.68747, a break above will see price entering weekly timeframe supply at 1.76290 – 1.70420.
Price reacted off of the 4hr supply area at 1.70372 – 1.69811 nearly hitting the big figure level at 1.70000. Sellers have not exactly showed enthusiasm in taking prices lower just yet. It appears from current price action that pro money may be in the middle of consuming minor lower timeframe supply areas for a possible move up, the tell-tale sign is the wicks that show up, while price is still dropping.
The near-term demand is seen at the round number 1.69000 coupled with previous monthly/weekly high levels at 1.69009/1.69198 which could act as support in the future. This cluster support area mentioned above could however be a nice level for pro money to fakeout price to the next demand area marked with an x at 1.68552 – 1.68729.
- Areas to watch for buy orders: 1.69000, 1.69009/1.69198, 1.68552 – 1.68729.
- Areas to watch for sell orders: 1.70372 – 1.69811, 1.70000.
- Most likely scenario: Price will likely push down deeper to collect buyers, the round number cluster support (levels above) may see a reaction, however do be prepared for a fakeout at that level to demand marked with an x (levels above).
The last report emphasized that pro money may be clearing the path for bullish price action, and we have recently seen this happen. Price used the cluster support area at 0.93124 (S/R flip level) and the previous weekly high at 0.93167 to rally prices higher.
The minor consolidation (supply: 0.93784 – 0.93751 demand: 0.93124 – 0.93167) has been broken north, with price just missing supply at 0.94232 – 0.09040 by 8-9 pips, making a high of 0.93942.
Bear in mind price is still within daily timeframe consolidation (supply: 0.94466 – 0.93777 demand: 0.92037 – 0.92825) and we are now in the upper limits of that consolidation.
A test of the near-term 4hr supply area at 0.94232 – 0.09040 coupled with the round number 0.94000 just belowshould happen soon, however judging by the current state of the daily supply area (levels above), the reaction may not be that strong and may only see prices retrace to minor demand (0.93124 – 0.93345) above the small S/R flip (level above), thus a break above is likely in the near future.
- Areas to watch for buy orders: 0.93124 – 0.93345
- Areas to watch for sell orders: 0.94232 – 0.09040, 0.94000
- Most likely scenario: Price will likely test the near-term 4hr supply area at 0.94232 – 0.09040 and may push prices down into minor demand at 0.93124 – 0.93345.
Not much has changed technically with this pair. Price is still within minor consolidation with demand at 101.536 and supply at 102.026 – 101.847. Keeping in mind we are also in daily timeframe consolidation as well (Supply: 104.831 – 104.121 Demand: 101.236 – 101.769) and currently trading within the lower limits of this range.
With all things being considered, long trades are more viable at this point. This however does not mean price will not break south out of the minor consolidation to collect much-needed liquidity for a possible push up. The most obvious place for this to occur is below, using the previous monthly lows at 101.325 coupled with the weekly S/R flip level at 101.328 along with weekly trendline confluence. A break above the minor consolidation may see price test the minor supply S/R flip level at 102.128.
- Areas to watch for buy orders: 101.536 (near-term demand), 101.325, 101.328.
- Areas to watch for sell orders: 102.026 – 101.847, 102.128.
- Most likely scenario: Price will likely test near term demand at 101.536 again, it is doubtful there will be many buyers left there, so push deeper to test the previous monthly lows/weekly SR flip area (101.325/101.328) is expected.