Weekly closing price: 0.7551
As we can all see from the weekly chart the commodity currency had another relatively respectable week, boasting a fourth consecutive weekly gain! On top of this, price conquered the weekly sitting at 0.7524-0.7450 (now acting ), and has potentially opened the trapdoor for the unit to test weekly supply penciled in at 0.7849-0.7752, which happens to merge with a weekly resistance extended from the high 0.7835.
Despite weekly action closing beyond weekly supply, daily movement remains sandwiched between a daily seen at 0.7581-0.7551 and a daily marked at 0.7524-0.7494. In order for our desk to become buyers, a decisive close beyond the daily will need to take place, thus confirming the weekly close above weekly supply.
The H4 resistance at 0.7561 remained firm on Friday, in spite of the rather brutal H4 two-candle whipsaw seen through this barrier during the early hours of the day. As we hope is demonstrated on the H4 chart, even with a H4 close above this H4 and the daily supply base mentioned above, H4 buyers still have to compete with nearby resistance at 0.7606 (November’s opening level) and the 0.76 handle.
Our suggestions: In view of the H4 structure, our desk has come to a general consensus that not only is a daily close above the current daily supply needed to become buyers, but also a H4 close above November’s opening level. Until this happens, we have absolutely no interest in chasing longs in this market.
Owing to the recent weekly close above weekly supply, we would strongly advise against selling for the time being. Yes, a sell could still very well work out and the close above weekly supply may turn out to be a deep-seated fakeout. Yet, being the conservative traders that we are, this is a risk we’re not willing to take.
Data points to consider: There are no scheduled high-impacting news events on the docket today relating to these two markets.