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
This pair has made some progress since the last analysis was completed, however a break is yet to be seen where price is presently capped (Supply: 1.37309 – 1.38690, Demand: 1.36434 – 1.36696). The lower base limit of the supply area just mentioned is currently holding price down, and at the time of writing, appears very bearish, as sellers are selling price relatively hard at the moment.
- Areas to watch for buy orders: 1.36434 – 1.36696, Daily demand (1.34770 – 1.35557).
- Areas to watch for sell orders: 1.37309 – 1.36890.
- Most likely scenario: Since price has found some resistance at the lower base limit of supply (1.36890) within where price is currently capped (Supply: 1.37309 – 1.38690, Demand: 1.36434 – 1.36696), sellers are likely to take this opportunity in breaking the lower 4hr demand area (levels above). If this does happen, look for buyers to come into the market at around the daily demand area at 1.34770 – 1.35557 (marked with a gold thumbs up seen on Monday’s weekly analysis) which is also deep within a weekly demand area at 1.34770 – 1.36837.
Little action was seen on the pound yesterday compared to the previous day’s trading action. So far, the sellers are winning the battle between the round number resistance at 1.69000 and the supply/demand flip area below at 1.68714 – 1.68824. Price is currently reacting off of the high, circled in black, as acting support at 1.68647.
- Areas to watch for buy orders: 1.68317 – 1.68427.
- Areas to watch for sell orders: 1.69000, 1.69963 – 1.69514.
- Most likely scenario: Price will likely drop to a minor demand area below at 1.68317 – 1.68427, before attempting to make a positive close above the round number 1.69000. The reasoning behind higher prices (as explained in yesterday’s analysis) is there are no obstacles above until the newly-formed daily supply area at 1.69963 – 1.69514. Take a look at the two black circles around this area, these may indicate supply consumption, so price should, on a positive close above the round number, be able to rally higher with little difficulty.
Price was expected to rally from the demand area at 0.92037 – 0.92203 to at least the demand/supply flip area at 0.92745 – 0.92570, which did happen. Price, however, did not spike down through the demand area to the round number 0.92000, clearly pro money had enough sell orders (liquidity) to buy into already.
- Areas to watch for buy orders: 0.92037 – 0.92203, 0.92000, and 0.91446.
- Areas to watch for sell orders: 0.92745 – 0.92570.
- Most likely scenario: This pair is now capped between demand at 0.92037 – 0.92203 incorporating the round number 0.92000 just below, and supply at 0.92745 – 0.92570. A break below demand is likely to happen due to price reacting bearishly at the weekly S/R flip level (seen on Monday’s weekly analysis) at 0.93718, and the daily demand area at 0.92054 – 0.92649 being weak thanks to the multiple deep moves within the area consuming buyers. If price does break below today, watch for buyers to come into the market at around the daily S/R flip area at 0.91446, paying special attention to the black circled area on the lower left area of the chart, this is a very important decision point (0.91542 – 0.91741).
The high of 101.674 has now been completely consumed with a positive close above, the fakeout below the daily demand area at 101.207 – 101.754 has likely been confirmed now. Extra selling pressure is being seen at the broken weekly trendline now acting as resistance. Price has recently reacted off of a decision point (demand) at 101.355 – 101.472, the reason it is a decision point is because this is where price made the decision to consume the high mentioned above. On a side note, it’s always a fantastic confidence boost to see newly-formed demand areas supporting the market if one is already long.
- Areas to watch for buy orders: 101.355 – 101.472, 100.927/101.000.
- Areas to watch for sell orders: 102.000, 102.365 – 102.128.
- Most likely scenario: A retrace still may be seen here past the newly-formed decision point at 101.355 – 101-472. The retrace may bring price back to around the fakeout area at 100.927/101.000, so do be prepared for this. Price will likely rally up to at least the round number 102.000, before meeting the supply area just above at 102.365 – 102.128.