Stepping across to the H4 chart, this is where we find things get interesting! The H4 candles are currently in the process of completing the D-leg of a H4 bull pattern that terminates just ahead of the H4 mid-way point 111.50. This – coupled with the H4 demand seen just below it at 110.85-111.35 is, in our opinion, a high-probability reversal zone, since let’s not forget that 111.50 also denotes the top edge of a weekly and is situated deep within the current daily demand.
Our suggestions: To avoid the possibility of a fakeout through 111.50, nevertheless, we have placed a pending buy order at 111.36 (just ahead of the current H4 ), with a stop-loss order set below at 110.83. Should this order trigger today, our first take-profit target will be the 112 neighborhood.
Data points to consider: There are no scheduled high-impacting news events on the docket today relating to these two markets.