Wednesday 17th December:  Remain vigilant today as we have a crammed schedule of high-impacting news.

EUR/USD:

Weekly Timeframe: At the time of writing, we can see that the Euro has broken above a minor weekly swap level seen at 1.24996, consequently forcing prices north towards a major weekly swap level coming in at 1.25816.

Daily Timeframe: The daily timeframe shows that the break above the aforementioned the minor weekly swap level has forced the market to test a daily supply area coming in at 1.26386-1.25459 (surrounds the aforementioned weekly swap level). It will be interesting to see what the 4hr timeframe can offer us.

4hr Timeframe: The recent buying seen yesterday closed above 1.25, but found a fantastic-looking 4hr supply area seen at 1.25671-1.25336 (located just within the aforementioned daily supply area) to be resistive enough to turn things around and allow sellers back into play.

Taking long positions is something we would not be comfortable doing right now, since we could effectively be buying from higher-timeframe sellers (see above). With that being said, we’d only consider selling the Euro if price closed below 1.25. Assuming this does happen today or even tomorrow, shorting any retest around the 1.24978 mark and targeting 1.24416 (as per the blue arrows) would in our opinion be a valid sell. Entering here with a pending sell order however may not be the best path to take, as there’s (as far as we can see) no logical area for a stop-loss order. Therefore, lower-timeframe confirmation from the 5/15 minute timeframes will be required for us to risk our money.

4hr

Current buy/sell levels:

  • Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
  • Sell orders: 1.24978 [Tentative] (Predicative stop-loss orders seen at: Dependent on where one confirms this level).

 

GBP/USD:

Weekly Timeframe: It appears that the selling pressure around the weekly swap level at 1.57166 is weakening, as further buying is currently being seen from a strong-looking weekly demand area coming in at 1.54260-1.56110. A weekly close above 1.57166 would likely entice further buying up to 1.58934, another weekly swap level.

Daily Timeframe: The daily timeframe shows that there is a clear support barrier seen at 1.55840-1.56291 which is presently holding the market higher. A daily close has been seen above the weekly swap level at 1.57166, which as a result has likely cleared the path north up to a beautiful-looking daily supply area seen at 1.59438-1.58338, which incidentally surrounds 1.58934.

4hr Timeframe: The 4hr timeframe reveals that the 1.56 level was obviously enough for the buyers to propel prices north, and take out not only 1.57, but also a partially consumed 4hr supply area at 1.57629-1.57334 as well.

Let’s quickly recap here. The weekly timeframe is showing bullish strength from the aforementioned weekly demand area, while the daily timeframe shows potential direction north. With that being said, we are naturally favoring buy trades at the moment. Buying at 1.57 around the 1.57050 point with corresponding lower-timeframe confirmation could potentially see tidy profits if one were to liquidate their position(s) around the 1.58 area (blue arrows).

4hr

Current buy/sell levels:

  • Buy orders: 1.57050 (Predicative stop-loss orders seen at: Dependent on where one confirms this level).
  • Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

 

AUD/USD:

Weekly Timeframe: As already mentioned in the previous analysis, price has recently closed below and retested a long-term channel support (now resistance) seen deep within a major weekly demand area at 0.80646-0.84601. This – in our opinion is not a good sign for anyone long the Aussie at the moment.

Daily Timeframe: The daily timeframe shows that the buyers and sellers are still seen battling for position around a daily demand area seen at 0.80809-0.82270.  However, taking into consideration what the weekly-timeframe analysis shows, it would appear that a further decline could be on the cards. For us to be convinced of genuine buying interest here, a close above the high 0.83749 would need to be seen.

4hr Timeframe: It was mentioned in the previous analysis, that we intended to take a confirmed lower-timeframe long entry based off of the round-number level 0.82. We were eventually filled at 0.82055, just above a small 15 –minute Quasimodo support area at 0.82002-0.82045, which came so very close to being stopped out! We exited our position at 0.82508 for a tidy profit.

Given that the higher-timeframe structure is showing weakness at the moment, we would not be comfortable buying 0.82 again. In the event that price closes below 0.82 sometime today, we would then be looking to short a confirmed retest to ride the wave down towards 0.81.

4hr

Current 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/JPY:

Weekly Timeframe: The weekly timeframe shows that the market continues to sell off as price is pushed down towards a weekly swap level coming in at 115.503 where active buying is currently being seen.

Daily Timeframe: The daily demand area seen at 117.225-117.873 has now been well and truly consumed, which as a result forced the market south towards the aforementioned major weekly swap level. In the event further buying is seen from here, we can likely expect the market to test a daily supply area coming in at 119.196-118.041.

4hr Timeframe:  It was mentioned in the previous analysis that we set a pending buy order at 116.844, just above a 4hr demand area at 116.326-116.784, as we expected price to bounce here. How wrong we were! The market consumed this area, and continued dropping towards a 4hr demand area seen at 115.444-116.087, which conveniently sits on top of the aforementioned major weekly swap level. For the time being, the USD/JPY pair is (in our view) capped between this 4hr demand area, and a small 4hr swap zone above coming in at 117.432-117.804.

In the event a breakout north is seen, price will immediately be trading around 118. This level may repel the market, and could in its own right be a tradable short, but considering we are seeing higher-timeframe buying at the moment – best to avoid selling there. On the other hand, a break lower could force price to test a partially consumed 4hr demand area coming in at 114.624-115.005 where a bounce could be seen. However, lurking just below here is an even more attractive area of demand – a 4hr Quasimodo support zone (113.847-114.252). The reason being is simply because this area is located just above a major weekly swap level seen at 113.710 making this a nice area to look for future longs.

At this point in time, we have no intention of trading between the capped limits; we would rather wait and let price action unfold, and trade once the market shows more promising direction.

4hr

Current 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: The weekly timeframe shows that the buyers and sellers are currently battling for position within a weekly supply area seen at 1.17225-1.15417 (surrounded by a larger weekly supply area seen at 1.18061-1.14739). It will be interesting to see what the lower timeframes show.

Daily Timeframe: Selling activity was seen yesterday from a daily supply area coming in at 1.17225-1.16182 (located deep within the weekly supply area mentioned above at 1.17225-1.15417). In the event  that follow-through selling is seen, we could potentially see the USD/CAD decline in value towards a major daily swap level seen at 1.14861, assuming of course that the daily channel support (prior resistance) is consumed first (1.10807/1.13842).

4hr Timeframe: The bearish reaction seen on the 4hr timeframe should not come as a surprise to anyone considering where price is located in the higher-timeframe picture (see above). However, the downward momentum seems to be fading as buyers appear to be entering the market around the 4hr channel support (prior resistance) line.

We believe a rally higher will be seen up to 1.17, and the current bearish move represents a small correction. Assuming that a rally higher does indeed take place from here, we would be very interested in selling around 1.16960, just below 117 (located deep within both weekly and daily supply – see above). Setting a pending sell order here would be too risky for us; we’d require some sort of confirmation from the lower timeframes before, since round-number levels usually suffer deep tests/spikes. First take-profit target for this trade would be set just above 1.16, that is assuming of course active buyers do not come into the market around the channel support (prior resistance), as shown by the red arrows.

4hr

Current buy/sell levels:

  • Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
  • Sell orders: 1.16960 [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 are beginning to fight back within the weekly decision-point demand area at 9126-9467, and so they should. This could be a lovely area to begin looking for long opportunities, let’s take a look on the lower timeframes to see what we can find.

Daily Timeframe: It was mentioned in the previous analysis that we felt the path south was likely clear for price to test a daily demand area coming in at 9126-9233, and as we can all see, it did just that. For anyone long the DAX at the moment, we see very little stopping prices rallying higher until around 9790, a daily swap level. It will be interesting to see what the 4hr timeframe offers.

4hr Timeframe: For anyone who follows our analysis on a regular basis, you may recall us mentioning that we set a pending buy order at 9169, just above a minor 4hr swap level at 9139, which unfortunately was not filled before price rallied north. All is not lost though. The 4hr timeframe is showing prices trading just below a 4hr supply area coming in at 9678-9583, which could in fact force the market lower to 9139, as per the red arrows. Be that as it may, if further buying is seen, which is very likely considering that price is currently trading around really attractive higher-timeframe demand at the moment (see above), we feel there is a good chance the aforementioned 4hr supply will be consumed, thus forcing the market to test a 4hr supply area coming in at 9906-9809.

4hr

Current buy/sell levels:

  • Buy orders: 9169 (Predicative stop-loss orders seen at: 9110).
  • Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

 

DOW 30:

Weekly Timeframe: The weekly timeframe shows that the sellers have brought price south down towards an ignored weekly Quasimodo resistance level at 17135. At this point in time, it appears that the market may close below this level which as a result would likely clear the path south down towards weekly support seen at 16051. However, we’re not making any judgments until the weekly candle has closed.  

Daily Timeframe: Serious selling was seen on the index yesterday, resulting in the market closing below the ignored weekly Quasimodo level at 17135. As far as we can see, there is very little stopping prices from declining further today down towards a daily decision-point demand area seen at 16895-16997. It will be here where we feel a move higher will be seen. Think about it logically for a moment. Price is currently trading below an ignored weekly Quasimodo level (see above) at the moment; this is no doubt consuming an unimaginable amount of traders (sell stops). Pro money may continue selling to collect all those sell stops to buy into at the aforementioned daily decision-point demand area. It will be interesting to see what the 4hr timeframe shows.

4hr Timeframe: The 4hr timeframe is very similar to the daily timeframe. The only difference we see is that price could potentially trade further into the aforementioned daily decision-point demand area towards a small 4hr demand zone coming in at 16905-16953. Trading off of here, rather than the top of the daily area would lower your risk and give you far better reward on your trade. So much so, we are going to set a pending buy order at 16964 with a stop set below at 16883.

4hr

Current buy/sell levels:

  • Buy orders: 16964 (Predicative stop-loss orders seen at: 16883).
  • Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

 

XAU/USD (Gold):

Weekly Timeframe: The weekly supply area seen at 1255.20-1226.18 seems to be proving itself as the sellers are currently seen driving price south. Assuming that the sellers keep up with this enthusiasm, it is likely we may see another test of 1136.30, a weekly decision-point demand level.

Daily Timeframe: The previous analysis reported that we believed that the path north is clear up to 1249.45 (located deep within the aforementioned weekly supply area), a daily Quasimodo level, and considering price was dancing around a daily decision-point demand area (1185.97-1203.20) at that time, it seemed like a good area to begin looking for longs. As we can all see, buyers did indeed come into the market here, and rallied prices up to a high of 1223.33, before the sellers showed who was boss and slammed the buyers back down to where price came from. We could interpret this recent move in two ways, it could have been the buyers clearing out the sellers to allow higher prices, or we could see it as selling strength. Nevertheless, let’s take a look on the 4hr timeframe to see what we can find.

4hr Timeframe: The 4hr timeframe tells a slightly different story. Price has indeed reacted nicely off of the 4hr Quasimodo support level at 1191.81, and pushed price above (blue arrow) a 4hr supply area coming in at 1220.56-1213.26. This is where it gets interesting. Above this 4hr supply area is what we believe to be consumed supply (pink trendline) i.e. very little selling opposition. Therefore, assuming that the buyers can hold out above 4hr Quasimodo support level, we could potentially see Gold rally towards 1235.40, a 4hr swap level.

With the new developments seen on Gold, and price currently trading within a daily decision-point demand area, we intend to begin watching the lower-timeframe price structure for a confirmed entry long with our first take-profit target set at 1212.36. And assuming all goes to plan, we intend to take final profits around 1233.83 as per the red arrows.

However, if we manage to find a buy signal here, we WILL KEEP IN MIND THAT PRICE IS TRADING OFF OF WEEKLY SUPPLY at the moment, and heavy selling could be seen at any time. For anyone considering looking for buys here, strict trade management rules are highly recommended. Good luck.

4hr

Current buy/sell levels:

  • Buy orders: Currently watching for confirmed entries around the 4hr Quasimodo support level at 1191.81 (Predicative stop-loss orders seen at: dependent on where one confirms this level).
  • Sell orders: Flat (Predicative stop-loss orders seen at: N/A).