Working our way from the top-down this morning, the weekly timeframe shows one very impressive buying tail printing at the moment, stretching a little over 500 pips at the time of writing! Scaling down to the daily timeframe, we can see that price has recently chalked up a third consecutive bull candle, consequently closing above the daily swap (supply) area at 120.49-119.98. This, on its own, could suggest further upside today/next week in the direction of another daily swap (supply) area at 122.15-122.86.
Next up is the 4hr timeframe. From this angle, the recent buying pushed prices above both a 4hr swap (resistance) level at 120.66 and the round-number 121.00, and soon after into a small 4hr swap (supply) zone at 121.19-121.39. At first glance we saw little room for prices to move. However, on a second look, the majority of offers are likely consumed around both 121.00 and 121.19-121.39 now, thus potentially leaving the path north clear up until at least 4hr supply at 122.35-121.82. In addition to this, the recent spike lower seen marked with a green arrow at 120.50 confirmed, at least to us, that the 4hr resistance –turned support level at 120.66 is well-bid.
Therefore, given the points made above, here is what we have noted so far:
• Watch for price to retest 120.66 once more. • Watch the lower timeframe action here – if confirmation is seen, look to jump in long targeting 121.73 just below the aforementioned 4hr supply zone. • However, be prepared for a deeper fakeout below 120.66 this time, since price may want to tag in bids sitting at the daily swap (demand) zone at 120.49-119.98.
Levels to watch/ live orders:
• Buys: 120.66 [Tentative – confirmation required] (Stop loss: dependent on where one confirms this level). • Sells: Flat (Stop loss: N/A).