The chart levels and zones will be color coded for the benefit of readers as follows:
Weekly TF = Black. Daily TF = Gold. 4hr TF = Brown
Price has done exactly as expected. At the time of writing, a very minor reaction was seen at the demand area created on Monday at 1.36114 – 1.36186. A spike to the downside was seen through the demand zone, piercing the round number 1.36000 and touching demand below at 1.35623 – 1.35984, which was reported may happen in yesterday’s analysis. A quick reminder of why pro money is likely doing this: Think how many sell stops are just below the minor demand area (levels above) coupled with breakout sellers, this is a perfect opportunity for the pros to collect sell orders (liquidity) to buy in to, as don’t forget, we are still within higher-timeframe weekly demand at 1.34770 – 1.36837 and currently trading just above daily demand at 1.34770 – 1.35557.
- Areas to watch for buy orders: 1.36114 – 1.36186, 1.36000, and 1.35623 – 1.35984.
- Areas to watch for sell orders: 1.36696 – 1.36432.
- Most likely scenario: Price will likely spike deeper into the new 4hr demand area below at 1.35623 – 1.35984, stopping out the majority of the traders who went long at the minor demand area marked with a check at 1.36114 – 1.36186, plus triggering the breakout traders’ sell orders just below, this is also what will likely happen at the round number 1.36000. The sell orders will be received with open arms by pro money for liquidity to buy into, with near-term targets at the 4hr demand/supply flip area at 1.36696 – 1.36432.
Oh my! Pro money clearly has enough liquidity already locked in for shorts, without the need to rally price up to the daily supply area at 1.69963 – 1.69514, as explained may need to happen when undertaking Tuesday’s analysis..
The demand area at 1.67835 – 1.68062, along with the daily (up) trendline and round number 1.68000 have been consumed, and now remains a confluent supply area to watch in the future. Price consuming this area proves that the spike above supply at 1.68752 – 1.68558 was indeed a fakeout collecting liquidity.
- Areas to watch for buy orders: 1.67000, 1.66630.
- Areas to watch for sell orders: 1.67622.
- Most likely scenario: Price just consumed the demand level to watch at 1.67236, pro money will likely push down a little further towards the round number 1.67000 for a bullish reaction to be seen. Do not expect the reaction to be anything magnificent, with the likely target for this down move being seen at the daily flip level below at (1.66630), which was reported in Monday’s weekly forecast emphasizing that it may happen sometime this week. Following the possible reaction at the round number (levels above), price will likely rally to daily support, which has now become resistance at 1.67622, making it a safe near-term target, and also providing pro money the much-needed liquidity if any more selling is to be done down to the daily S/R flip level (levels above) below.
The AUD still remains capped between supply at 0.92745 – 0.92570 and demand at 0.92037 – 0.92203. A spike above the supply area has recently been seen; unfortunately, it is too early to tell if it is a fakeout or a consumption wick.
- Areas to watch for buy orders: 0.91542 – 0.91741, 0.91446 (Daily S/R flip level)
- Areas to watch for sell orders: 0.92745 – 0.92570.
- Most likely scenario: Much the same as the last analysis, price will likely break the lower demand area (0.92037 – 0.92203) along with the round number 0.92000 dropping towards the decision point/demand area at 0.91542 – 0.91741, with the daily S/R flip level just below at 0.91446. The reason being is the higher-timeframe influence regarding the bearish reaction off of the weekly S/R flip area (0.93718), along with the daily timeframe being in a weak-looking demand area at 0.92054 – 0.92649.
A quick recap is in order for this pair. The weekly timeframe currently shows price trading around a long-term S/R flip level at 101.328, which has yet to see a positive close below. The daily timeframe shows a fakeout south occurred at daily demand area (101.207 – 101.754), so higher prices are naturally expected.
The last analysis reported price will likely break the round number 102.000 north, forcing price to test the 4hr supply area above at 102.365-102.128 coupled with weekly trendline resistance. Price did this, and is now, at the time of writing trading lower at 101.746.
- Areas to watch for buy orders: 101.335 – 101.472, 101.328, 100.927/101.000
- Areas to watch for sell orders: 102.365 – 102.128.
- Most likely scenario: Lower prices are currently being seen from the reaction off of the supply area (102.365 – 102.128) along with weekly trendline resistance. Price will likely trade towards the demand area below at 101.335 – 101.472, with the weekly S/R flip level just below at 101.328 because most of the demand/buy orders have already been consumed with the tails (circled in brown). If in the unlikely event price breaks this level, we may see another touch at the fakeout level at 100.927/101.000 before higher prices are seen.