Weekly closing price: 0.9956
After crossing swords with the 2016 yearly opening level seen on the weekly chart at 1.0029 three weeks ago, the sellers finally made an entrance last week. Wiping out all of the prior week’s gains, the downside move could extend as far south as weekly support at 0.9770 in the coming weeks.
Bouncing down to the daily candles, we can noticeably see that since the 27th October price has been trading within a consolidation in between a daily at 1.0080 and a daily support logged in at 0.9896. Given the push south from the noted 2016 yearly opening level, however, the aforesaid daily support is likely going to enter the fray sometime this week.
Switching over to the H4 timeframe, the Swissie spent Friday treading water around the 0.9928 mark and retested the underside of a resistance taken from the low 0.9938. Of particular interest here should be the fact that fusing with this is a 38.2% Fib resistance at 0.9966 and a local coming in at 0.9974 (lower green box).
Suggestions: Considering that the daily support does not come into the picture until we reach 0.9896 (essentially the 0.99 handle), and weekly price is showing promise from the 2016 yearly opening level, a sell from the lower green H4 zone could be an option today. If, on the other hand, you fancy a short from parity (1.0000) seen just above, there’s also attractive confluence on display there as well (H4 resistance taken from the high 1.0037 and a 61.8% Fib resistance at 0.9993).
Personally, we favor parity for a sell given that it garners far more attention, as does the 61.8% Fib level over the 38.2% band. Be that as it may, we will only consider a sell valid from here if, and only if, a H4 full or near-full-bodied candle forms. This would be enough evidence to warrant a short, targeting 0.99/daily support at 0.9896.
Data points to consider: FOMC member Harker speaks at 12.10am GMT .