EUR/USD:

Weekly Timeframe: For the past four weeks now price has been trading in between a major combined weekly demand/Quasimodo support area at 1.22403-1.24420/1.22866, and a weekly support swap level coming in at 1.25816.

Daily Timeframe: The daily timeframe on the other hand shows that ever since the 06/11/2014, price has been ranging between smaller daily supply and demand zones (1.26386-1.25459/1.22877-1.23809) within the aforementioned larger weekly areas. A breakout above would likely confirm buying strength from the aforementioned weekly demand/Quasimodo support area, and in the same way, a breakout below would likely inform us that this weekly area is vulnerable, and strength is being seen from the aforementioned weekly support swap level.

4hr Timeframe: The EUR/USD saw a small sell off immediately around the open (1.24630), but found the 1.24180 level to be supportive enough to turn things around and allow the buyers back into the market. From here a rally higher ensued up to 1.25 that consequently forced price to close above the 4hr channel resistance, where at the time of writing selling interest is currently being seen.

Could this move be a subtle sign that the market wants higher prices?  We believe this could be possible as long as the 1.24422 4hr support swap level holds. That being the case, we are going to set an alert around 1.24477 to begin watching for lower-timeframe buying confirmation, for the simple reason that this could effectively provide a high risk/reward trade long.

Setting pending orders on this pair without confirmation is something we’re not prepared to do when we are seeing no higher-timeframe direction (see above – the Euro is ranging).

4hr

Buy/sell levels:

  • Buy orders: 1.24477 [Tentative] (Predicative stop-loss orders seen at: 1.24153).
  • Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

 

GBP/USD:

Weekly Timeframe: At this point in time, it appears that serious buying interest is being seen from the weekly demand area coming in at 1.54260-1.56110. This is exactly what happened last week, and we can all see how that turned out! The sellers pulled out a humongous sledge hammer, and smashed the GBP back down to demand. Let’s see what we can find on the lower timeframes.

Daily Timeframe: For those who follow our analysis on a regular basis, you may recall us mentioning that in order for the GBP/USD to rally higher, a daily supply area seen at 1.59438-1.58338 would need to be consumed beforehand, and that still applies today.

4hr Timeframe: It was mentioned in Friday’s report that we’ll be watching for lower-timeframe buying confirmation around the 1.56141 mark, just within the 4hr support area coming in at 1.55917-1.56299.  We recently attempted to trade a small 5 minute Quasimodo support level at 1.56011, and it unfortunately missed getting filled by a few pips. It was a perfect long set up considering it was right around the London open! From here prices rocketed north, breaking high above the 1.57 number.

Providing that this level holds as support, there could be a potential long opportunity from here targeting the 1.57883 hurdle, just below 1.58. And in the event that price can break above here, we will then be firmly trading within the daily supply area mentioned above at 1.59438-1.58338.

In our opinion, trading long off of 1.57 is viable, but would you want to set a pending buy order there with no supporting demand seen below, other than the small kink seen at 1.56783? We wouldn’t! Waiting for lower-timeframe confirmation around 1.57034 is the path we intend to take.

4hr

Buy/sell levels:

  • Buy orders: 1.57034 [Tentative] (Predicative stop-loss orders seen at: Dependent on where one confirms the level).
  • Sell orders:  Flat (Predicative stop-loss orders seen at: N/A).

 

AUD/USD:

Weekly Timeframe: The weekly timeframe shows that price has just recently hit a major weekly demand area coming in at 0.80646-0.84601. Let’s see what the lower-timeframes have to say about this.

Daily Timeframe: At the time of writing, buying activity is being seen off of a daily demand area at 0.83147-0.84336, which is located just within the aforementioned weekly demand area. We see very little that could stop the buyers from rallying prices up to at least 0.85769, a weekly Quasimodo swap level.

4hr Timeframe: Unfortunately, we do not have enough data to allow us to see what the 4hr-timeframe price action is like in the past, so we’ll work from what we have for now.

The market opened 34 pips lower than Friday’s close (0.85019) at 0.84675, which in turn forced the price below the current 4hr channel support for the second time. Be that as it may, this might not be a bearish signal since we mustn’t forget that price is currently dancing around higher-timeframe demand at the moment (see above).  

Ultimately, we want the Aussie to begin showing some bullish strength. A good start would be for price to hold above 0.85, which is proving difficult at this point in time. If a further decline in value is seen from here down towards a minor 4hr demand area coming in at 0.84153-0.84367, we will be watching how price behaves on the lower-timeframes around the 0.84399 mark, as this could potentially provide us with a fantastic entry long with great risk/reward potential.

4hr

Buy/sell levels:

  • Buy orders: 0.84399 [Tentative] (Predicative stop-loss orders seen at: 0.84115).
  • Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

 

USD/JPY:

Weekly Timeframe: Last week saw the USD/JPY positively close above a major weekly supply area coming in at 117.931-116.799. Does this mean we could possibly be seeing further buying up to a weekly Quasimodo resistance level at 122.180? Let’s take a look on the lower timeframes to see how price is structured.

Daily Timeframe: For anyone who bought based on the weekly close (see above); you may be in for some drawdown, for the simple reason that the daily timeframe is showing price trading around a daily supply area (119.820-118.700) at the moment. Assuming that the further selling is seen from here, prices could drop as far as a daily decision-point demand area coming in at 116.326-117.040, where at which point we expect active buyers to enter the market.

4hr Timeframe: The 4hr timeframe shows that after the market opened at 118.742, the buyers immediately pushed prices up to 119, which in turn saw active selling forcing price down to 118. At the time of writing, 118 is holding quite nicely, which as a result could attract further buying back up to 119. With this in mind, we would not consider buying this pair until price closes above 119 and successfully retests this level as support. This move would likely confirm genuine buying strength from the recently closed weekly candle, and also show that there is potentially weakness being seen within the daily supply area mentioned above at 119.820-118.700. Therefore, with the above taken into consideration, we have decided to remain flat for the time being.

4hr

Buy/sell levels:

  • Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
  • Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

 

USD/CAD:

Weekly Timeframe: At the time of writing, selling is once again being seen around the long-term weekly supply area coming in at 1.18061-1.14739. Let’s see what the lower timeframes have to say about this.

Daily Timeframe: The daily timeframe shows that the selling pressure around the 1.14655 high was clearly too strong for the buyers to overcome, and as a result saw a full-bodied bearish candle printed yesterday. We see very little that could stop prices from declining here down to at least a 4hr demand area coming in at 1.11896-1.12416 (part of a stacked demand formation – the lower demand is seen at 1.11211-1.11813).

4hr Timeframe: The 4hr timeframe shows that the market opened at 1.14267, and then saw immediate buying that forced prices to spike above a 4hr supply area coming in at 1.14474-1.14290. In our opinion this wick stopped out a ton of sellers attempting to fade the area and also trapped breakout buyers in the process, giving well-funded traders plenty of buy orders to sell into, and sell they did, price dropped like a rock! Anyone who bought here may not have been aware of the humongous weekly supply (levels above) that loomed over the current 4hr supply area like a big-black cloud.

Throughout this selling onslaught, the 1.14 level, and a very important 4hr decision-point demand area at 1.13243-1.13413 was consumed. This move likely confirms that the path south is clear down to at least 1.13. However, we are not expecting this level to put up much of a fight, and as such a push lower will likely attract further selling down to 1.12382, an area which has seen much interest from buyers in the past (located just above the daily demand area mentioned at 1.11896-1.12416). Assuming that the above does indeed come to light, we will be looking to trade this the following way:

  1. We’ll be watching for any retest opportunities to short just below the 1.13 level at 1.12973, and will be targeting 1.12418.
  2. We’ll also be looking to trade any bounce that may form off of 1.12382 around the 1.12418 mark. For anyone considering buying here as well, we would advise waiting for lower-timeframe confirmation seeing as that we would effectively be buying against higher-timeframe sellers (weekly supply) at that point.

4hr

Buy/sell levels:

  • Buy orders: 1.12418 [Tentative] (Predicative stop-loss orders seen at: 1.12240).
  • Sell orders: 1.12973 [Tentative] (Predicative stop-loss orders seen at: Dependent on where one confirms the level).

 

DAX 30:

Weekly Timeframe: The weekly timeframe shows that the buyers have been well and truly in control for the past two weeks, which has consequently forced price to trade up towards an all-time high seen at 10048. A break above here would likely attract further buying resulting in the DAX continuing on its (near) three-year uptrend.

Daily Timeframe: The daily timeframe shows that price remains trading just below a daily resistance zone coming in at 10048-10007. With that being said, price is not exactly showing any real signs of bearish behavior at the moment considering its location. Take a look at the most recently closed daily candle, it shows a buying tail was printed, very similar to Friday’s candle.

1hr Timeframe: The 1hr timeframe shows quite clearly that price is still trading between a small 1hr supply area coming in at 10002-9988, and a 1hr demand area seen at 9867-9903. Check out the market symmetry too, price sells heavily, grinds north, and then hammers back down to demand – just beautiful.

It was reported in the previous analysis, that there were tentative buy orders expected around the 9908 mark, and as we can see there clearly was. We do hope some of our readers took advantage of this small move seen yesterday. The 5 minute timeframe offered a fantastic entry long at 9:05am GMT around the 9905 area.

We will continue to watch the index on this timeframe within the current hourly range – once again, tentative buys are seen at 9908, and sells at 9983.  In the event that price breaks out north here, we would not consider this to be a buy signal since all price would have effectively done is trade into higher-timeframe resistance (see above). A break below on the other hand could be an early signal that a sell off may well be seen down towards a 1hr demand area coming in at 9786-9820. The reason why price could potentially drop thus far is because to the left marked with a green trendline we see very little active demand.

1hr

Buy/sell levels:

  • Buy orders: 9908 [Tentative] (Predicative stop-loss orders seen at: 9864).
  • Sell orders: 9983 [Tentative] (Predicative stop-loss orders seen at: 10011).

 

DOW 30:

Weekly Timeframe: The DOW has been trading beautifully within a nice-looking trending channel for over five years now. The recently closed weekly candle shows that the upward momentum may be fading for the moment, as price failed to make a higher high which as a result formed an inside candle. Let’s take a look at the lower timeframes to see what we can find.

Daily Timeframe: Yesterday was clearly one for the sellers as price dropped down to just above a daily decision-point demand level seen at 17689. Assuming that the buyers can hold price above here, this could provide a nice base in which to go long from. A break below this level on the other hand could encourage further selling down towards a daily decision-point demand area coming in at 17281-17427.

1hr Timeframe: The 1hr timeframe shows that the sellers absolutely obliterated the 1hr demand area seen at 17761-17785, which resulted in prices trading lower to the next area of demand coming in at 17708-17731, where the buyers seem to be showing interest.

In the event that price can trade back down to the 17708-17731 area without hitting the 1hr Quasimodo resistance level seen above at 17850, then we will be entering at market around the 17735 area, with our stop placed below at 17705. The reason for this is simply because the market is showing short-term direction in our view. Buyers have proved an area of demand (17708-17731) and cleared all near-term supply out above around the 17800 level, which in turn clears the path north to at least the aforementioned 1hr Quasimodo resistance level (as per the blue arrows), which is where we’ll be targeting.

1hr

Buy/sell levels:

  • Buy orders: 17735 [Tentative] (Predicative stop-loss orders seen at: 17705).
  • Sell orders: Flat (Predicative stop-loss orders seen at: Flat).

 

XAU/USD (GOLD):

Weekly Timeframe: Serious buying has recently been seen in the Gold markets, as prices skyrocketed north from a weekly decision-point demand level coming in at 1136.30 towards a weekly swap level seen at 1202.91. Assuming that the buyers can overcome any selling opposition around here, price will likely continue to rally until it reaches another weekly swap level seen at 1244.08. It will be interesting to see what the lower timeframes show.

Daily Timeframe: It was mentioned in the previous analysis that the path south was likely clear down towards an area of daily support at 1149.42, and as we can all see, it clearly was, and boy did it react beautifully! The aggressive buying seen yesterday pushed prices up to just below a daily supply area coming in at 1235.51-1222.37 (seen just below the weekly 1244.08 level) where selling interest is seen coming in to the market at the moment.

4hr Timeframe: For anyone who follows our analysis on a regular basis, you may recall us mentioning to watch for confirmed buying opportunities on the lower timeframes around the 1156.07 mark, just above a 4hr demand area coming in at 1146.76-1154.80. However hard we tried, we just could not find an entry around this point which was absolutely devastating when we saw price rocket towards a 4hr supply area at 1226.52-1220.97! Well done to anyone who entered long around this area!

It’s now ‘decision time’ on gold as price is firmly trading around supply, which can be seen right from the weekly down to the 4hr timeframe (see above). If the buyers can hold out above a current 4hr resistance swap level seen at 1202.83, then this will likely be a good sign that the buyers will mount another attack on the 4hr supply area mentioned above. 

A close below here on the other hand would be our cue to begin looking for shorting opportunities on the retest of 1202.83 around the 1201.84 mark. In the event that the sellers can hold prices lower here, follow-through selling would likely then be seen down towards a support flip level seen from the daily timeframe at 1182.01, which would incidentally be our first take-profit target (as per the blue arrows).

4hr

Buy/sell levels:

  • Buy orders: Flat (Predicative stop-loss orders seen at: N/A)
  • Sell orders: 1201.84 [Tentative] (Predicative stop-loss orders seen at: Dependent on where one confirms this level).