For the readers’ benefit:

Price action confirmation levels: Simplymeans traders will likely wait for price action to confirm a level by consuming an opposing supply or demand area, then entering a trade on a possible retracement, this may occur on the lower timeframes also.

Pending orders: means pending orders are likely seen.

EUR/GBP:

Weekly Timeframe: A to-the-pip touch reaction has been seen off of a weekly supply area at 0.81571-0.80635. Could this be enough to push prices down into the weekly demand area below at 0.76931-0.78623?

Daily Timeframe: The daily timeframe is depicting the beginnings of an uptrend (notice the higher highs and higher lows being seen [0.80351/0.78905/0.80647]) contrary to what the weekly timeframe is telling us.  If price breaks above the high 0.80647, then we may be seeing higher prices to come! Also, we mustn’t forget that price only just missed hitting the weekly demand area at 0.76931-0.78623 by literally a few pips on 21/07/14 – 0.78729, so we may be seeing weekly buyers in action here.

4hr Timeframe: It is clear now that the close above the round number 0.8 was indeed a fakeout, and a deep one at that. It would be hard to even guess how many traders got sucked in with this move, both sellers attempting to fade the level, and also breakout buyers. The 4hr decision-point area at 0.79666-0.79769 marked with a red circle was completely consumed by the recent down move; this suggested to us that the round number 0.8 would again be a valid selling level if/when price returned there.

Direction on the higher timeframes is a little difficult to fathom out at the moment. A reaction of off a weekly supply area (0.81571-0.80635) has recently been seen, while on the daily timeframe, it appears a mini uptrend is forming (see above). Since price reacted so beautifully to the round number 0.8, and then sold off sharply down to a mini 4hr support level at 0.79396, whilst also slightly breaking it at 0.79332, the question we should all be asking is, is this break a fakeout or consumption? in our opinion, it’s the latter, since we are coming off of weekly supply (the higher timeframes usually overrule), and also because of the ferocity of the down move recently seen, indicating pro money were likely clearing our any potential buyers at 4hr support (0.79396)  before a the next move south is seen.

With that being said, even though we believe this to be consumption, pro money could very well rally price from here to collect any unfilled sell orders left around the 4hr supply area at 0.80083-0.79898, which would make the spike/tail (0.79332) both a fakeout and consumption at the same time.

EURGBP 4HR

Pending orders/Price action confirmation levels:

  • Areas to watch for buy orders: Pending orders: No pending buy orders are seen in the current market environment. Price action confirmation levels: No price action confirmation buy levels are seen in the current market environment.
  • Areas to watch for sell orders: Pending orders: 0.79882 (Stop loss: 0.80103 Take profit: Dependent on how price approaches).  Price action confirmation levels: No price action confirmation sell levels seen in the current market environment.

 

USD/CAD:

Weekly Timeframe: With the consumption of the weekly supply area recently seen at 1.10522-1.09996, we expected prices to at least touch base with the weekly Quasimodo resistance level at 1.11252 before selling was seen. It appears pro money may have already accumulated all the liquidity they needed to sell. The next area of interest for the sellers on this timeframe is likely around a weekly decision-point level at 1.08774.

Daily Timeframe: The close above weekly supply (levels above) caused the daily supply area at 1.10522-1.10133 to be consumed as well (which was at the time located deep within the weekly supply area mentioned above). With that being said, the decline in price is seen much clearer on this timeframe, and at the time of writing, buyers and sellers are seen battling it out within a daily decision-point area at 1.09327-1.09825, which could very well repel the market and encourage active buying. Alternatively, a break below here would suggest to us a drop in price down to the daily support flip level at 1.08227 (a little below the weekly decision-point level at 1.08774) may be seen.

4hr Timeframe: The sellers were in full force recently with over a 140 pip drop from the 4hr supply area at 1.11033-1.10872. The round number 1.1 was surprisingly ignored as the sellers smashed straight through the area, not even stopping to retest it before continuing lower to a notable 4hr demand area at 1.09329-1.09515. Our pending buy order placed just above this area at 1.09545 was also filled in the process. Our first take-profit target set for this long trade is just below the round number 1.1 at 1.09966, as we expect unfilled sell orders to be left there when price broke through this level. Be that as it may, we have a small 4hr decision-point level marked with a red circle at 1.09800 to contend with first, assuming price can break above this level, price is then very likely free to hit our first take-profit target mentioned above, but until then, unfortunately it’s back to sitting on our hands.

USDCAD 4HR

Pending orders/Price action confirmation levels:

  • Areas to watch for buy orders: Pending orders: 1.09545 (Active) (Stop loss: 1.09277 Take profit level(s): [1] 1.09966 [may be subject to change]). Price action confirmation levels:No price action confirmation buy levels are seen in the current market environment.
  • Areas to watch for sell orders: Pending orders: 1.11356 (Stop loss: 1.11746 Take profit levels(s): Dependent on how price approaches). Price action confirmation levels: No Price action confirmation sell levels are seen in the current market environment.

 

USD/CHF:

Weekly Timeframe: At the time of writing, the weekly timeframe shows price is holding nicely within weekly supply at 0.94546-0.93081. Should this pair see a sell off, we can likely expect active buyers to come into the market around the weekly resistance flip level at 0.90927.

Daily timeframe: Consolidating price action is currently being seen on the daily timeframe between a daily decision-point level at 0.93019, and a daily supply area above at 0.94546-0.93702. Selling at the aforementioned weekly supply area looked like a fantastic opportunity to get into a long-term short position (assuming price could overcome the 0.90927 level); things did not look so good once we went down to the daily timeframe though, and spotted the very obvious-looking daily decision-point level (level above), since this level would (in our opinion) need to be consumed before lower prices are seen in the market.

4hr Timeframe: The current selling action seen on this chart looks pitiful considering price is currently trading within a weekly supply area at 0.94546-0.93081. What we are essentially seeing here on the 4hr timeframe is a magnified view of the daily consolidation area that is currently in place (for details see above). In our humble opinion, even though price is in fact dropping overall, it is not depicting any real selling strength.

Take a quick look at the pink trendline placed on the chart, this is not to show a downtrend as such, what it is, is an attempt to demonstrate that whilst price was dropping south, pro money were spiking prices north to collect any unfilled sell orders to continue selling (take note of the following consumption wicks: 0.93619/0.93717/0.93751), now with the sell orders above consumed, this likely leaves the path north clear for a future rally higher. Buying interest has only recently come into the market around the round number 0.93, and what a beautiful touch that was!  This move filled our last take profit target (0.93051) from our short position taken at 0.93845. If follow-through buying continues, and the high marked with an arrow at 0.93619 gets consumed, we could very likely be seeing price rally all the way up to at least the round number 0.94.

If the above is indeed seen, we will very likely set a pending buy order around the round number 0.93, awaiting a possible retracement to fill any unfilled buy orders before continuing higher.

USDCHF 4HR

Pending orders/Price action confirmation levels:

  • Areas to watch for buy orders: Pending orders: 0.92635 (Stop loss: 0.92410 Take profit levels(s):  Dependent on how price approaches). Price action confirmation levels: No price action confirmation buy levels are seen in the current market environment.
  • Areas to watch for sell orders: Pending orders: No pending sell orders are seen in the current market environment. Price action confirmation levels: No Price action confirmation sell levels are seen in the current market environment.