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
Price still remains deep within a daily demand area at 1.36727 – 1.37313. It was reported in the last analysis that we should wait, as no positive direction had been confirmed. Any traders who could not wait were more than likely stopped out by the spike below at the demand area marked with a check at 1.36973 – 1.37035 assuming traders went long around this area.
At the time of writing it does not look good for the buyers, price did not even manage to hit supply area number 3 at 1.37487 – 1.37374 as selling pressure was seen to come in to the market at around the high of 1.37309.
Remember, it’s always good to keep the bigger picture in mind, no matter what timeframe you trade. Price is still seen within a daily timeframe consolidation with a supply area at 1.39669 – 1.39342 and a demand area at 1.36727 – 1.37313. The weekly timeframe shows that a long- term uptrend is in place, however remain aware price is currently trading in and around a weekly supply area at 1.42470 – 1.38580.
- Areas to watch for buy orders: N/A
- Areas to watch for sell orders: N/A
- Most likely scenario: It is very difficult to give a likely scenario on this pair. We have two probable outcomes: 1. A rally is seen and price consumes supply (3) at 1.37487 – 1.37374, that is when going long becomes more high probability, or 2. Price breaks the daily demand area at 1.36727 – 1.37313 south, and we enter into a weekly demand area at 1.34770 – 1.36837 in which case, deeper analysis would be needed inside the weekly demand area.. Until then, waiting is the best trade to take right now. We can do further analysis when a positive break is seen.
The fakeout between the ‘dummy’ demand area marked with an x at 1.68333 – 1.68513 to the demand area below at 1.68072 – 1.68260 gave a possible 2R winning trade, not too bad considering higher -timeframe analysis is emphasizing short trades at the moment.
The last analysis reported price being capped between a demand area at 1.68072 – 1.68260 and the round number 1.69000 as acting supply. The demand area just mentioned was recently broken, breaking a bullish daily trendline in the process, using a small supply area above at 1.68824 – 1.68714. One can see how easy the most recent drop in price sliced through previous price action to the left marked with a bold trendline, the reason being was most of the buyers were already consumed by pro money making the drop look effortless.
- Areas to watch for buy orders: 1.67622 – 1.67783
- Areas to watch for sell orders: 1.68260 – 1.68072
- Most likely scenario: Price is currently showing some buying strength at around 1.67622 – 1.67783 area which is the bottom of the previously consumed price action area. However, the most we are likely to see here at this temporary demand zone is a small rally up to supply which was previous demand at 1.68260 – 1.68072 with a round number (1.68000) just below, then a push down to the next fresh demand area at around the 1.67236 level. This will be the next trouble area for sellers to contend with.
This pair still remains capped between supply at 0.94253 – 0.94040 and a minor demand area at 0.93186 – 0.93345. We have seen a beautiful reaction to the supply area just mentioned as reported may likely happen in the last analysis. Near-term targets for traders short here are at a new minor demand area marked with an x at 0.93462 – 0.93575 and the final target around the lower minor demand area at 0.93186 – 0.93345 supported with an S/R flip level at 0.93167. The reason why targets are so close is due to the daily supply area at 0.94468 – 0.93758 being so weak due to a spike marked with a circle to the left consuming most of the higher-timeframe sellers on the 10/04/14.
- Areas to watch for buy orders: 0.93186 – 0.93345, 0.93462 – 0.93575 (minor demand area marked with an X)
- Areas to watch for sell orders: 0.94253 – 0.94040, 0.95434 – 0.94862 (Fresh daily supply area above)
- Most likely scenario: Price will likely meander within this minor consolidation (minor demand: 0.93186 – 0.93345 supply: 0.94253 – 0.94040) possibly testing either supply or demand today. A break the upper 4hr supply at 0.94253 – 0.94040 is likely to happen soon, due to being in a weak daily supply area at 0.94468 – 0.93758 which in turn will likely see a break also. This break may not happen today, but do be on the lookout for it in the near future. A positive break above will see price touching base with a fresh daily supply area at 0.95434 – 0.94862.
Taking the last analysis into consideration reporting price was likely to attack sellers at the high 102.365, we did see this happen, but selling pressure was too strong and price dropped and dropped hard! Consuming a newly formed demand area (1) at 101.851 – 102.048, and now touching base at the daily demand area at 101.207 – 101.754, confirming that the circled area is indeed a fakeout on the 4hr timeframe as reported may likely happen in Tuesday’s analysis.
- Areas to watch for buy orders: 101.536, 101.328.
- Areas to watch for sell orders: 102.129 – 102.365.
- Most likely scenario: Price has now confirmed a fakeout on this timeframe marked with a circle by consuming the newly-formed demand area (1) below at 101.851 – 102.048. We will likely begin seeing pro money consuming lower demand areas. The first logical area that may cause problems is at 101.536, and then of course, just below this, the sellers have the weekly S/R flip level at 101.328 to contend with. However, this does not mean price will just drop through these levels; we are likely to see some retracements from buyers around those levels. The most likely place for a retracement to reach is the fakeout zone (supply) at 102.129 – 102.365 marked with a circle, so do make sure to keep a close eye on these levels today.