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
At last some action to get excited about! The circled area shows price breaking a daily demand zone at 1.36727 – 1.37313 consuming most of the buy orders. A break of this demand area was expected as price had recently hit and reacted bearishly at a weekly supply area (1.42470 – 1.38580), possibly triggering long-term sell orders. However, any sellers who sold the breakout may see trouble ahead today as we have yet to see a break of the low 1.36432, once this happens we can be pretty sure price will hit the next demand area below marked with a gold thumbs-up sign at 1.34770 – 1.35557.
Here, the picture becomes much clearer, above it was said we should essentially wait for the daily low of 1.36432 to be consumed, here is why: notice there’s a sneaky 4hr demand area marked with an arrow at 1.36434 – 1.36696 hiding just below the daily demand area (levels above), this 4hr demand area is currently supporting the market, and will do until price consumes it.
The Euro, one again is capped between a newly formed supply area (1) at 1.37309 – 1.36890 and a demand area which was just mentioned at 1.36434 – 1.36696.
- Areas to watch for buy orders: 1.34770 – 1.35557 (Daily demand area), 1.36434 – 1.36696.
- Areas to watch for sell orders: 1.37309 – 1.36890.
- Most likely scenario: We are likely to see a move today out of where price is currently capped (Supply: 1.37309 – 1.36890, Demand: at 1.36434 – 1.36696). The limits of these two areas may be nice trading limits for the lower timeframes, do be on your guard though for possible fakeouts! If we see price break the demand area just mentioned south, this will confirm lower prices will likely happen. For price to break north, we need to see a positive close above the supply area just mentioned, this will put it into question as to whether the area marked with a circle below was a fakeout or not? Once again, to be on the safe side, it may be best to hold on trading this pair until an area breaks and gives some confirmation on possible direction.
According to the last analysis conducted on this pair, price was expected to rally up to a supply area which was previous demand at 1.68260 – 1.68072 with a round number (1.68000) just below. We did see this happen, however, not expecting price to drop so low before doing so. Buyers have been completely consumed at the minor demand area (1.67622 – 1.67783) shown on the chart below.
The demand level still to watch and remains fresh with likely buy orders waiting to be filled is around the 1.67236 area.
- Areas to watch for buy orders: 1.67236.
- Areas to watch for sell orders: 1.68260 – 1.68072, 1.68000.
- Most likely scenario: Price will likely continue to react off of supply consuming sellers at 1.68260 – 1.68072 as there’s extra selling pressure with the round number 1.68000 located just below. We will likely see a push down south for the fresh demand level just below at the 1.67236 area. Why will this likely happen? Pro money has cleared out any potential demand areas until the fresh area just mentioned. Lower-timeframe traders will likely buy the momentum jumping on what appears to be a small uptrend forming. Pro money sells in small chunks to all these buy orders consuming each and every one of them until the buy orders dry up, leaving price little choice but to drop where the buyers outweigh sellers (fresh demand).
This pair depicts beautiful price action that is so often easy on the eye. Any trader who got in short at the supply area (0.94253 – 0.94040) would have had their targets hit already as reported in the last analysis.
We recently saw the minor demand area marked with an x at 0.93462 – 0.93575 be consumed, and price reacting to the minor demand area below at 0.93186 – 0.93345 which is supported with an S/R flip level at 0.93167. Price has clearly used the demand area marked with an x (levels above) as a ‘dummy’ demand zone to entice traders to buy there with their stops just below the zone. These stops (sell orders) were gladly gobbled up by pro money as liquidity to buy into.
At the time of writing, price still remains capped between supply at 0.94253 – 0.94040 and demand at 0.93186 – 0.93345.
- Areas to watch for buy orders: 0.93186 – 0.93345.
- Areas to watch for sell orders: 0.94253 – 0.94040, 0.95434 – 0.94862 (Fresh daily supply area above).
- Most likely scenario: Very similar to the last analysis conducted, the consolidation area (Demand: 0.93186 – 0.93345 Supply: 0.94253 – 0.94040) has yet to see a positive break. Price will likely consolidate within the range area just mentioned, possibly testing either supply or demand today. A break of the upper 4hr supply area at 0.94253 – 0.94040 is likely to happen soon, due to being near a weak daily supply area at 0.94468 – 0.93758 which in turn will likely see a break above 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.
The last analysis it was noted the following may happen:
- Likely to begin seeing pro money consume lower demand areas.
- To expect some retracements as they consumed the buying pressure.
- The most likely place to see a retrace to would be the circled-fakeout zone at 102.129 – 102.365 that nearly reacted to the pip.
Price did exactly as above, consuming a demand level (101.536) in the process before reaching the weekly S/R flip level with weekly trendline confluence at 101.328. If the sellers manage to overwhelm the buyers at the S/R weekly flip level with a positive close below, be prepared for the possibility of even lower prices, as of now though, a slight bullish reaction is being seen.
- Areas to watch for buy orders: 101.328.
- Areas to watch for sell orders: 102.129 – 102.365.
- Most likely scenario: Considering a reaction is being seen off of the weekly S/R flip level at 101.328, we can expect the possibility of higher prices today, at least until around the fakeout zone (supply) marked with a circle at 102.129 – 102.365. The reasoning behind this is the heavy selling seen on the most recent 4hr candle; this takes a lot of capital to move the market like this. Generally, traders on the lower timeframes will see this selling momentum and believe it will go on forever, without even considering who they are selling to! The answer, more often than not is they are selling to well-funded and well-informed traders who happily accepts these orders to help fill theirs to push price back up to an area of fresh supply where sell orders overcome their buy orders very much like our fakeout zone supply (levels above), so this enables the bigger traders to be able to liquidate their positions as the much-needed liquidity is there.