EUR/USD:
Weekly Timeframe: Last week saw the market print a whopping full-bodied bearish candle stretching a little over 340 pips from open (1.1180) to close 1.0837). This king-size whopper managed to take out a weekly Quasimodo support level at 1.1109, and drive deep into a weekly demand area coming in at 1.0760-1.0988. A break below this zone would likely see further downside towards another weekly demand area positioned at 1.0499-1.0740.
Daily Timeframe: The daily timeframe shows that Friday was clearly a good day for anyone short the Euro as the market sold off a cool 187 pips. This move was very likely caused by the NFP employment numbers coming out better than expected at 295K. As a result of this, price closed for the week attacking a daily demand area seen at 1.0760-1.0872 (located deep within the aforementioned weekly demand area), which, as you can probably see, accommodates a long-term daily swap (support) level visible at 1.0825.
4hr Timeframe: The 4hr timeframe shows that Friday’s descent consumed two psychological barriers – 1.1000 and 1.0900, consequently leaving the daily swap level at 1.0825 clearly in the limelight for the time being.
The Euro is in a clear downtrend, that is obvious, but with price currently trading within higher-timeframe demand (see above) at the moment, we cannot help but feel that the market will try to stabilize itself from Friday’s selling, and might, just might, bounce higher this week. With that said, the long-term daily swap level sitting just below current price at 1.0825 will be our first port of call today. This level’s historical significance goes right back to 1997, which makes it a great area to be looking for confirmed buy trades. In the event that we find a long entry here, our first take-profit target will be set at 1.0895, seen just below 1.0900. The reason we require confirmation at this level is simply because price could, and very likely will, fake lower down to the 1.0800 handle.
However, supposing that price closes below this daily level and retests it as resistance, this will likely suggest further downside is going to be seen on the Euro, as we believe, and this is only our opinion here, that this remains a key obstacle to a move below the major weekly demand area mentioned above at 1.0760-1.0988.
Current buy/sell orders:
- Buy orders: watching the 1.0825 mark for lower timeframe confirmation (Predicative stop-loss orders seen at: dependent on where one confirms this level).
- Sell orders: Flat (Predicative stop-loss orders seen at: N/A).
GBP/USD:
Weekly Timeframe: Cable, like the Euro, also formed a large full-bodied bearish candle stretching a little over 390 pips from open (1.5414) to close (1.5020). This move (likely caused by the NFP result as well) consequently forced prices down to just above (13 pips to be exact) an already proven weekly Quasimodo support level coming in at 1.5007.
Daily Timeframe: The situation on the daily timeframe shows that cable closed the week attacking a daily demand area at 1.4987-1.5061 (sits beautifully on top of the aforementioned weekly Quasimodo support level). This area, as far as we can see, is the last line of defense for the weekly Quasimodo support level. Should this barrier be consumed this week, we can then likely expect the GBP to decline in value down towards a strong-looking daily demand area coming in at 1.4812-1.4949.
4hr Timeframe: From the 4hr timeframe, we can see price was driven south into a clean-looking 4hr demand area coming in at 1.4987-1.5020 (encapsulates the major round number 1.5000) , which, if you look back to the daily chart, you’ll notice that it’s located deep within the daily demand area mentioned above at 1.4987-1.5061.
Very similar the Euro, The GBP is also in a clear downtrend at the moment. However, we cannot ignore the fact that price is trading around very obvious demand from the weekly down to the 4hr timeframe (see above), which, incidentally, is where we believe price will likely try to stabilize itself today from the recent sell off seen on Friday. That being the case, we’re going to be watching price action very closely today around the aforementioned 4hr demand area. In the event that we see a signal to enter long, we’ll look to ride this baby up to the 1.5100 handle where we plan to take partial profits and move our stop to breakeven.
On the flip side, if this 4hr demand area fails to hold, we’ll then shift our attention to a small, almost hidden, 4hr Quasimodo support level seen just below at 1.4970 (located just below daily demand at 1.4987-1.5061). This could provide pro money with a fantastic barrier in which to fake price below to – one can only imagine the amount of stops located just below 1.5000 and this 4hr demand area!!
Current buy/sell orders:
- Buy orders: watching for lower timeframe confirmation round 4hr demand 1.4987-1.5020 (Predicative stop-loss orders are seen at: 1.4982).
- Sell orders: Flat (Predicative stop-loss orders are seen at: N/A).
AUD/USD:
Weekly Timeframe: For the past five weeks, price has been trading, or should we say ‘lingering’ above a weekly demand area seen at 0.7449-0.7678, which, as you can probably see, converges beautifully with a long-term weekly trendline extended from the low 0.4775 (2001). Should a rally be seen here, weekly resistance (as far as we can see) is not expected to come into the market until around the 0.8064 region.
Daily Timeframe: Overall, the daily timeframe has barely seen any change since the beginning of February, as buying and selling still remains capped between two daily swap levels coming in at 0.7691 and 0.7844. However, at this point in time, price is seen trading nearer the lower limits of this consolidation, so anyone looking to sell this pair may want to keep this, and the fact that price is trading above weekly demand (see above) at the moment noted down.
4hr Timeframe: The 4hr timeframe shows that price finished the week attacking a small 4hr demand area coming in at 0.7666-0.7703 (surrounds the 0.7691 daily swap level), which, as you can probably see, converges beautifully with a 4hr trendline extended from the low 0.7625 (03/02/15).
On the whole, we can see that the Aussie is in an overall downtrend, and that the move higher from the low 0.7625 could in fact just be a retracement within the down move. However, like both the Euro and Cable, we cannot ignore the fact that this pair is trading around demand from the weekly down to the 4hr timeframe (see above). As such, we plan to closely watch how price behaves on the lower timeframes around the aforementioned 4hr demand area today. If we manage to find a confirmed entry to enter long, we’ll target 0.7749 first and foremost, and then, given enough time, the 0.7802 level. This level, which is also a psychological number, is very likely going to see a reaction since this is, as far as we can see, where the NFP selling began, hence unfilled sell orders may still remain.
As a final note, take a step back from your screen and just look at the two trendlines, looks very much like we have a symmetrical triangle forming doesn’t it!
Current buy/sell orders:
- Buy orders: watching for lower timeframe confirmation around 4hr demand at 0.7666-0.7703 (Predicative stop-loss orders seen at: 0.7662).
- Sell orders: Flat (Predicative stop-loss orders seen at: N/A).
USD/JPY:
Weekly Timeframe: Last week shows price closed (120.69) above the upper limits of a weekly symmetrical triangle formation (121.83/117.43). This move has very likely cleared the path north for further buying up to a weekly Quasimodo resistance level coming in at 122.18.
Daily Timeframe: From the pits of the daily timeframe, we can see that Friday’s trading sessions forced price to close just above a daily resistance level seen at 120.45 (more than likely caused by the positive NFP number). This move has very likely opened the gates for prices to challenge the daily supply area seen above at 122.61-121.54 (encapsulates the aforementioned weekly Quasimodo resistance level).
4hr Timeframe: Looking at the 4hr timeframe, we can see that price recently rallied and viciously spiked above the 121.00 handle before selling off into the close. This spike seen at 121.27 likely stopped out the majority of traders attempting to fade this number, and also, at the same time potentially trapped breakout buyers in the process.
With that being said, we feel that if the buyers can hold out above the daily resistance – turned support at 120.45 this week, price will likely close above 121.00 and potentially see further upside towards 4hr supply at 121.83-121.52, which is hanging just below the daily supply area mentioned above at 122.61-121.54.
Given the points made above, our team’s main focus today will be on the 120.45 mark. If we manage to find a confirmed entry long here on the lower timeframes, we’ll look to ride this train up to 121.48 (seen just below the aforementioned 4hr supply area). However, depending on how price behaves around the 121.00 number, we may take some of our position off the table here.
Current buy/sell orders:
- Buy orders: 120.45 [Tentative] (Predicative stop-loss orders seen at: dependent on where one confirms this level).
- Sell orders: Flat (Predicative stop-loss orders seen at: N/A).
USD/CAD:
Weekly Timeframe: Overall, price action on the weekly timeframe remains relatively unchanged. The USD/CAD is still capped to the upside by a weekly Quasimodo resistance level visible at 1.2765. Should further selling be seen from here, weekly support (as far as we can see) is not expected to come into the market until around the 1.2260 region.
Daily Timeframe: The daily picture shows that support came into the market once again on Friday from within a weak-looking daily-decision-point demand area seen at 1.2378-1.2468. If we see price close above the high seen marked with a red arrow at 1.2662, we then feel there’s a very good chance that price will rally to test the aforementioned weekly Quasimodo resistance level, since most of the supply to the left appears to have already been spiked (consumed).
4hr Timeframe: From the 4hr timeframe, we can see that price spiked south towards 4hr demand at 1.2386-1.2424 before rallying higher on Friday. This ascent took out both the 1.2533 4hr resistance level, and round number 1.2600 before closing (1.2616) for the week at the underside of a 4hr supply area coming in at 1.2662-1.2616.
With this taken on board, two things spring to mind…
- The aforementioned 4hr supply area is, in our opinion, a key obstacle to a move towards the weekly Quasimodo resistance level (1.2765), since, if you take a look back to the daily chart, you’ll notice the high 1.2662 (marked with a red arrow) that needs to be consumed in order for higher prices, is also the high of our 4hr supply area.
- As already mentioned above, price took out (closed above) the 1.2600 level, but just before the market closed, we can see that price retested this barrier as support. Therefore, assuming that the buyers can hold out above this level today, we may see further buying into the 4hr supply area, or, even a break above it.
Given the points made above, our team has no interest in selling at this 4hr supply until we see price convincingly close below the 1.2600 level.
However, in the event that price breaks above the current 4hr supply area, this will likely attract further buying up to 1.2700. Notice that above here, we’ve labelled the yellow area as a fakeout zone. The reason for this is that round numbers, in our experience, tend to fakeout, call it stop hunts, liquidity hunts, or whatever, the fact is they do fakeout. With that said, this round number 1.2700 in particular is just begging to be faked, since we have a beautiful 4hr supply area lingering just above it at 1.2771-1.2736, which is sitting at the underside of the weekly Quasimodo resistance level.
So, with all of this taken into consideration, a convincing close above the 4hr supply area at 1.2662-1.2616 will, in effect, be our cue to place a pending sell order just below 4hr supply (1.2771-1.2736) at 1.2727.
Current buy/sell orders:
- Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
- Sell orders: Flat (Predicative stop-loss orders seen at: N/A).
USD/CHF:
Weekly Timeframe: The weekly timeframe shows that price printed a large full-bodied bullish candle last week, which stretched a little over 315 pips from open (0.9529) to close (0.9846). This recent ascent managed to close price above a long-term weekly swap level seen at 0.9746, and at the same time, has potentially opened the gates for further buying towards a weekly Quasimodo resistance level coming in at 0.9970.
Daily Timeframe: We can see from the daily timeframe that Friday’s (NFP induced) ascent took out a daily Quasimodo resistance level at 0.9740, and as a result, hit a daily swap area coming in at 0.9866-0.9918 before closing for the week. This swap area is, in our opinion, a key obstacle to a move towards the aforementioned weekly Quasimodo resistance level.
DOW 30:
Weekly Timeframe: Last week’s trading action shows that the 18098 high was clearly not strong enough to hold as support, which, as a result, saw the market sell off and close at 17869. Should further selling be seen from here, weekly support (as far as we can see) is not expected to come into the market until around the ignored weekly Quasimodo level at 17135.
Daily Timeframe: From the daily timeframe, we can see that most of the selling action took place on Friday, which consequently forced the market down to a daily demand area coming in at 17686-17836.
4hr Timeframe: The latest coming in from the 4hr timeframe shows that the 18148 4hr swap level provided the sellers a clear base in which to short this market on Friday. The sell off, as you can probably see, took out two technical barriers (18064 and 17952) with relative ease, and plummeted towards a 4hr demand area seen at 17806-17862 (located just above the aforementioned daily demand area).
In the event that the buyers can hold out above this area of demand, the market will likely increase in value up to at least the 4hr swap level 17952. Our team has come to a general consensus that buying from here just does not offer enough risk/reward. However, if prices were to close above 17952 (essentially removing the selling opposition from this hurdle), and then come back to retest demand, we’d happily take a long here, and target 18064.
Conversely, if this demand area gives way, price could potentially drop all the way down to the 4hr demand area coming in at 17561-17617 (located deep within the daily demand area seen at 17561-17655), since we see very little active demand to left. With that being said, a close below this area, would, in effect, be our cue to begin watching for price to retest this area as supply.
Current buy/sell orders:
- Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
- Sell orders: Flat (Predicative stop-loss orders seen at: N/A).
XAU/USD (Gold):
Weekly Timeframe: From the weekly timeframe, we can see that Gold sold off last week which consequently saw price break (a few pips) below a weekly demand area at 1166.8-1195.0. Could this be all that’s needed to encourage further selling down to a weekly decision-point demand level at 1136.3? Let’s take a look at the lower timeframes to see what we can find…
Daily Timeframe: The daily timeframe shows that Friday’s trading action smashed through a major daily swap level seen at 1182.0, and closed for the week (1166.9) literally to-the-pip at the low 1166.8, which you may remember is the low of the weekly demand area just mentioned above. Although it’s visible from the weekly timeframe, the daily timeframe shows that below this low, there is, as far as we can see very little active demand to the left – check out that huge demand consumption tail seen at 1142.6! Therefore, a close below this all-important low would likely force the market further southbound towards the aforementioned weekly decision-point demand level.
4hr Timeframe: Contrary to what the weekly and daily timeframe show, the 4hr timeframe reveals that price closed the week just below a relatively long-term 4hr Quasimodo support level at 1170.5, but, at the same time hit support coming in from a 4hr descending channel line extended from the low 1228.1.
Today’s trading will likely see the buyers and sellers battle for position between these two levels. Assuming that the 4hr Quasimodo level – now resistance can hold the market lower, price will then likely decline in value down towards a 4hr demand area (formed from the daily demand consumption tail – see above) at 1142.6-1152.1 (located just above the aforementioned weekly decision-point demand level). We’d definitely consider entering short at this ignored Quasimodo level if we see corresponding lower timeframe confirmation.
Conversely, if the buyers can hold out above the 4hr descending channel line, we’ll then likely see price break above, and possibly retest the 4hr Quasimodo level as support, which essentially could be a lovely signal to enter long up to 1188.3.
Current buy/sell orders:
- Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
- Sell orders: 1170.5 [Tentative] (Predicative stop-loss orders seen at: dependent on where one confirms this level).
