EUR/USD:
Weekly Timeframe: The weekly timeframe shows that price has broken below a major weekly Quasimodo support level at 1.1109, and, as a consequence hit weekly demand coming in at 1.0760-1.0988.
Daily Timeframe: Yesterday saw the Euro take out daily demand at 1.1045-1.1127. This consequently drove the market south into a daily swap area seen below at 1.1016-1.0952 (located just within the weekly demand area mentioned above at 1.0760-1.0988).
4hr Timeframe: The latest coming in from the 4hr timeframe reveals that price closed below the mid-level number 1.1050, which, subsequently, saw price viciously spike north up to a 4hr decision-point supply area seen at 1.1114-1.1143 (this move was likely a result of negative unemployment numbers coming out of the US). Following this, price continued south down to the 1.1000 psychological threshold, where, at the time of writing, supportive pressure is currently being seen.
With all of the above taken into account, we feel that the Euro is trading in oversold territory at the moment and could be ready for a bounce higher. Nevertheless, before this happens, we feel there’s a good chance that price will challenge the 1.1000 level once more, although this time we expect a push deeper to be seen, thus taking out more stops i.e. sell stops (liquidity) for pro money to buy into.
With that said, our team’s main focus in this market today will be to watch how price behaves if a retest of 1.1000 is seen. However, please do keep in mind that we have the mighty NFP release later on, which, as you probably know, could distort any technical signal seen, so do trade cautiously.
Current buy/sell orders:
- Buy orders: 1.1000 [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).
GBP/USD:
Weekly Timeframe: The weekly timeframe shows that further selling has been seen from the weekly swap area coming in at 1.5426-1.5561. This move has consequently pushed the GBP deep into the depths of a weekly swap level seen at 1.5270.
Daily Timeframe: Yesterday’s trading action saw the market plunge deep into a daily demand area sitting at 1.5195-1.5252, which, if you look back to the weekly chart, you’ll notice it’s located just below the aforementioned weekly swap level.
4hr Timeframe: For anyone who read our previous analysis on Cable, you may recall us mentioning that we felt the GBP had further to decline before supportive pressure was seen. As you can probably see, price did in fact depreciate, and as a result, hit a 4hr demand area coming in at 1.5208-1.5237 (located within daily demand at 1.5195-1.5252) filling our pending buy order set at 1.5239 in the process. With our order now filled, we’re looking for price to break above the highs at 1.5268, and then, with a bit of luck, hit the 1.5300 handle which is our first take-profit target.
The reasons for why we believe the GBP could rally from here is simply because price is currently trading around a weekly swap level, a daily demand area, and a 4hr demand area located within this daily demand. What is more, we have additional support coming in from a 4hr trendline extended from the low 1.4950.
Current buy/sell orders:
- Buy orders: 1.5239 [Live] (Predicative stop-loss orders are seen at: 1.5203).
- 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. 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: At this point in time, the daily timeframe shows that the buyers and sellers continue to consolidate between daily swap levels 0.7844 and 0.7619.
4hr Timeframe: The AUD/USD pair, as you can see, broke out below of the small 4hr consolidation (0.7844/ 0.7800), and shortly after retested the underside as resistance. This consequently forced the market southbound down towards 4hr demand coming in at 0.7738-0.7764. We mentioned in the previous report that if price were to close below this range, short-term sells down to the aforementioned 4hr demand would likely be on the cards. Unfortunately for us though, we were not at our desks the time this happened!
Taking into account that price is back trading around a clearly reactive 4hr demand area at the moment, short-term longs could very well be possible up to 0.7800. On the flip side, if price closes below and retests this area as supply, we’ll then be looking for short-term sell trades down to 0.7700, and potentially 4hr demand at 0.7643-0.7667 given enough time.
Current buy/sell orders:
- Buy orders: watching for lower timeframe confirmation around 4hr demand at 0.7738-0.7764 (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/JPY:
Weekly Timeframe: The weekly timeframe shows that price is currently trading around the upper limits of a weekly symmetrical triangle formation (121.83/117.43). A convincing close above this limit would likely encourage follow-through buying up to a weekly Quasimodo resistance level coming in at 122.18.
Daily Timeframe: Recent developments on the daily timeframe show price trading just below a daily resistance level seen at 120.45.This level, as far as we can see, remains a key obstacle to a move towards a daily supply area visible at 122.61-121.54, which, if you look back to the weekly chart, you’ll notice that this area encapsulates the aforementioned weekly Quasimodo support level.
4hr Timeframe: The 4hr timeframe shows that the USD/JPY pair rallied higher yesterday, consequently breaking above and retesting the 120.00 handle. However, as you can probably see, price is also trading directly below a 4hr supply area at 120.73-120.39, which surrounds the daily resistance level mentioned above at 120.45. It is not so much the 4hr supply area we’re looking at now, it is this daily level, since, if you remember from the daily timeframe analysis above, this barrier is potentially a key obstacle to price moving higher.
Our team has come to a general consensus that WAITING is the best position to have on this pair at the moment. Why is this? Well, if price closes above and retests the 120.45 daily swap level today, our team will, with lower timeframe confirmation, jump in long. In the event that price closes below and retests 120.00 as resistance however, short-term sells (with lower timeframe confirmation) down to the 4hr Quasimodo support level could very well be the path to take.
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/CAD:
Weekly Timeframe: The weekly timeframe shows that price is still being held lower by a weekly Quasimodo resistance level visible at 1.2765. If further selling is seen from here, price will likely hit the weekly swap level coming in at 1.2260.
Daily Timeframe: The daily picture reveals that support is currently being seen from a weak-looking daily decision-point demand area at 1.2378-1.2468. We believe this area to be fragile for the following reasons:
- On two occasions price broke below this zone (03/02/15 – 17/02/15), and has, as a result likely weakened the buying pressure here.
- Each time price hit this area, we can see that the buyers were clearly not strong enough to form a higher high, which, like above, indicates possible weakness.
4hr Timeframe: Recent developments on the Loonie show price reacted beautifully to a minor 4hr demand coming in at 1.2386-1.2424, thus capping price between here and a 4hr Quasimodo resistance level seen above at 1.2533.
Trading between these two barriers is a valid strategy (tentative buys seen at 1.2430, and sells at 1.2526) as long as one (well for us anyway) waits for lower timeframe confirmation, since buying and selling within capped (consolidated) areas can often be subject to fakeouts.
With that being said, let’s not forget that the NFP release could see some very wild swings in the market later on, and could potentially invalidate any lower timeframe confirmation signal seen, so trade on the side of caution here!
Current buy/sell orders:
- Buy orders: 1.2430 [Tentative] (Predicative stop-loss orders seen at: 1.2374).
- Sell orders: 1.2526 [Tentative] (Predicative stop-loss orders seen at: 1.2566).
USD/CHF:
Weekly Timeframe: Last week saw price close just (by a pip) above a weekly swap level at 0.9529, which has, at the time of writing, clearly attracted further buying in the market this week. In the event that the buyers can continue with this tempo, price will very likely hit another weekly swap level coming in at 0.9746 sometime soon.
Daily Timeframe: The daily timeframe shows that the recent ascent has likely consumed any remaining selling opposition around the daily swap area seen at 0.9552-0.9656, and, at the same time, potentially paved the way north for prices to challenge a daily Quasimodo resistance level seen at 0.9740 (located six pips below the aforementioned weekly swap level).
4hr Timeframe: Recent developments coming in from the 4hr timeframe reveal that price broke above 0.9650 and rallied up to just below the 0.9700 handle. It is around this area that we’re beginning to see resistive pressure enter the market.
Considering the price behavior seen on the higher timeframes at the moment (see above), we believe that this pair will likely see further buying today (of course this is likely dependent on the NFP result). However, as already mentioned above, price is currently trading just below round-number resistance (0.9700), therefore our team cannot condone entering long until this level is taken out. A close above and successful retest of this level would, in effect, be our cue to begin looking for (lower timeframe) confirmed longs into this market. Nonetheless, just above this number, as you can probably see, sits a 4hr swap area coming in at 0.9720-0.9745 which could potentially repel the market. Therefore, when, or if price breaks above 0.9700, ultimately, we’d like to see price to take out this zone as well. This may be wishful thinking, but with the expected volatility today, it could just be possible.
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).
DOW 30:
Weekly Timeframe: Recent movements on the weekly timeframe show that price is currently retesting the weekly high 18098 as support.
Daily Timeframe: The latest coming in from the daily timeframe reveals that the small daily decision-point demand area seen at 18056-18130 continues to hold the market higher despite the recent break below it. This area is, as far as we can see, the last line of defense protecting the 18098 weekly swap level. If price closes below here, this would likely open the doors for further downside towards the 17896 daily swap level.
4hr Timeframe: From the 4hr timeframe, we can see that price is trading between a narrow band comprising of the weekly swap level 18098, and a minor 4hr swap level positioned just above at 18148.
If price closes above and retests 18148 as support today (which we think it might), we’d then begin looking for confirmed long entries on the lower timeframes, ultimately targeting the 4hr Quasimodo resistance level seen at 18242. The reason for needing confirmation here is simply because supply seen marked with a green arrow at 18195-18166 could very well provide resistance to the market.
On the other hand, in the event that price closes below 18098, we’d then keep a close eye on the 4hr swap area seen just below at 18047-18014 for potential long opportunities. This area will ( for us) require lower timeframe confirmation, since it has already been hit once already this week, and because of this, the buying pressure may have been weakened here.
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 price is currently capped between a weekly swap level coming in at 1222.2, and a weekly demand area seen at 1166.8-1195.0.
Daily Timeframe: The daily timeframe shows that buying and selling is currently taking place in between the aforementioned weekly swap level, and a daily ascending channel support line extended from the low 1131.4 (07/11/14). A close above here would likely force the market to test a small daily supply area at 1236.6-1227.7. On the other hand, should a close lower be seen, further selling would then likely ensue down towards a daily swap level coming in at 1182.0.
4hr Timeframe: The XAU/USD pair, as you can probably see on the 4hr timeframe is trading around the upper limits of a 4hr demand area coming in at 1190.0-1197.2. This area, as mentioned in yesterday’s report, is a significant zone to us since it boasts not only trendline confluence from the daily ascending channel line (see above), but also, is located just within a weekly demand area mentioned above at 1166.8-1195.0. In addition to this (something we failed to see yesterday), check out how price approached the 4hr zone, notice that each time price dropped lower, a spike north was seen to likely collect any unfilled sell orders thus allowing prices to keep falling. What this also did at the same time though, was likely clear the path north for a rally!
At the time of writing, our team has decided to enter into a buy position at market here and has been filled at 1197.1, with a stop set just below at 1189.3. Our first take-profit target is set around the 1209.2 level, and if we manage to get above this hurdle, we’d be looking for price retest it as support and rally to the 4hr decision-point supply area above at 1225.2-1217.7, which is where we’ll close out our full position due to this area encapsulating the aforementioned weekly swap level.
Current buy/sell orders:
- Buy orders: 1197.1 [Live] (Predicative stop-loss orders seen at: 1189.3).
- Sell orders: Flat (Predicative stop-loss orders seen at: N/A).
