EUR/USD:
Weekly Timeframe: Looking at the weekly timeframe, we can see that price has recently took out a weekly demand area at 1.0499-1.0740, and at the same time, likely cleared the path south down towards a long-term weekly swap level seen at 1.0411.
Daily Timeframe: The daily timeframe shows that the buyers attempted to take the Euro higher yesterday, but appeared to have run into trouble just below a daily swap level barrier coming in at 1.0664.
4hr Timeframe: The latest coming in from the 4hr timeframe reveals that support came into the market around the mid-level number 1.0550, which, as you can probably see, was clearly enough to stimulate a move above the small 4hr decision-point supply area seen at 1.0633-1.0582. This short rally in price likely flushed out a ton of buy stops (including ours), and potentially cleared the path north for price to challenge the 4hr decision-point supply area at 1.0715-1.0666 (sits just above the aforementioned daily swap level).
Taking into account the high volatility expected to hit the markets today (see title); we currently have our eye on the following levels/areas:
For the buy side:
- The daily swap level at 1.0499. This hurdle will likely see a bounce at the very least since price faked below here not too long ago, and as such, there could very well be unfilled buy orders still remaining. Waiting for lower timeframe confirmation is recommended here to avoid a possible fakeout. However, if one wanted to place a pending buy order, they could do so with a stop placed below the low 1.0461.
- The weekly swap level seen lower down in red at 1.0411. Even though this is a long-term higher-timeframe level, like above, we’d still recommend waiting for price to confirm this number on the lower timeframes to avoid a fakeout.
For the sell side:
- The 4hr decision-point supply area mentioned above at 1.0715-1.0666 could potentially see a reaction today. Lower timeframe confirmation is a must here for us, since price visited this zone once already at 1.0682 (12/03/15), thus potentially weakening supply and lowering the chances of a rebound being seen.
Current buy/sell orders:
- Buy orders: 1.0499 [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this level) 1.0411 [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this level).
- Sell orders: 1.0715-1.0666 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 1.0722).
GBP/USD:
Weekly Timeframe: The weekly picture shows that cable took out a major weekly swap level seen at 1.4832 last week, and is, at the time of writing, seen retesting this beauty as resistance.
Daily Timeframe: The buyers and sellers are currently seen battling for position within a daily demand area seen at 1.4686-1.4805. Assuming that further buying is seen from here, price could potentially rally as far north as the daily decision-point supply area seen at 1.5136-1.5020.
4hr Timeframe: From the 4hr timeframe, we can see that price reacted just beautifully from the 4hr decision-point supply area at 1.4892-1.4844, which, as you can see, forced cable to close below the 1.4800 handle. For those who read our previous report on this pair, you may remember that this was, in effect, our cue to begin looking for price to retest this number as resistance. With that in mind, we managed to short this level with a very small position on the basis of seeing selling tails on the 5 minute chart. The trade was closed at 1.4751 for decent intraday profits.
Considering where price is trading on the higher timeframes at the moment, our main focus today will be on the 1.4700 number. The reasons for why is simply because we believe that this level could ‘make or break’ the GBP/USD pair. A convincing close below this hurdle would (as far as we can see) do three things.
- Clear the path south down to 1.4600 – potential selling opportunity if a retest is seen.
- Seriously weaken the aforementioned daily demand area.
- Potentially confirm strength from the major weekly swap level mentioned above.
On the other hand, say price rebounds from 1.4700 (tentative buy orders seen just above at 1.4705); this could confirm strength within the daily demand area, and see price attack the weekly swap level.
Current buy/sell orders:
- Buy orders: 1.4705 [tentative – strong confirmation required] (Predicative stop-loss orders are seen at: dependent on where one confirms this level).
- Sell orders: Flat (Predicative stop-loss orders are seen at: N/A).
AUD/USD:
Weekly Timeframe: The weekly timeframe shows that the Aussie saw a further decline in value last week, which, in our opinion, did two things:
- Force price deeper within weekly demand at 0.7449-0.7678.
- Closed below a long-term weekly trendline support extended from the low 0.4775.
Daily Timeframe: : From the daily picture, we can see that although price is located around the upper limits of daily demand at 0.7449-0.7598 (located deep within the aforementioned weekly demand), the buyers have yet to muster enough strength to clear immediate resistance seen above at 0.7691. Maybe with today’s expected volatility, we may see some development here.
4hr Timeframe: Moving on to the 4hr timeframe, price is clearly seen ranging between the 4hr demand area at 0.7572-0.7614, and a 4hr decision-point supply area coming in at 0.7692-0.7666 (located just below the daily swap level mentioned above at 0.7691).
Similar to our previous analysis, our team has no interest in trading this pair until price does one of the following:
- Hits the small, almost hidden, 4hr Quasimodo support level at 0.7587, seen deep within the 4hr demand area mentioned above (tentative buy orders are seen just above at 0.7589).
- Price closes above the aforementioned 4hr decision-point supply area, and, with a little bit of luck the round number 0.7700 handle as well.
Current buy/sell orders:
- Buy orders: 0.7589 [Tentative – confirmation required] (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 the USD/JPY pair pierced above December’s high 121.83 last week, which has likely opened the trapdoor for prices to now challenge the weekly Quasimodo resistance level seen just above at 122.18.
Daily Timeframe: The buyers and sellers are still seen battling for position around the underside of a daily supply area coming in at 122.61-121.54 (encapsulates the aforementioned weekly Quasimodo resistance level). Assuming that further selling is seen from here, price will very likely visit the daily swap level positioned below at 120.45.
4hr Timeframe: Movements on this pair have been somewhat cramped since the beginning of the week. However, with the FOMC taking center stage today, a boost of volatility will likely be seen.
From looking at the 4hr timeframe, we believe that the 4hr supply seen at 122.01-121.67 could very well be a fake. What do we mean by fake? Well, price reacted nicely to this area once already, thus giving traders the confidence to short here again. Nonetheless, lurking just above this level, as you can see in green, is the aforementioned weekly Quasimodo resistance level which is just begging to be hit. Therefore, this 4hr supply may have been planted here by pro money to attract millions of traders to place shorts here, and set their buy stops where? You got it! Right above the zone, which will provide a handsome pocket of liquidity i.e. buy stops for well- funded traders to sell into from the weekly level. With this in mind, we have decided to set a pending sell order at 122.16 to try and catch this potential fakeout.
Conversely, if price does not do the above, and continues to trade south, a close below 121.00 is what we’ll be looking for, since this will likely open the gates for a move down to the aforementioned daily swap level. The reason we believe price could drop this far is simply because demand to the left has already likely been consumed – take note of the two obvious demand consumption tails seen marked with blue arrows at 120.83/120.62.
Current buy/sell orders:
- Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
- Sell orders: 122.16 (Predicative stop-loss orders seen at: 122.55).
USD/CAD:
Weekly Timeframe: The current situation on the weekly timeframe shows price is currently resting on top of the recently breached weekly Quasimodo resistance level at 1.2765. If the buyers manage to hold the market above this number, further buying could very well ensue up towards 1.3014 – another weekly Quasimodo resistance level.
Daily Timeframe: From looking at the daily timeframe, we can see that price is still being held lower by January’s high 1.2797 at the moment. Although price has broken above this hurdle on two occasions now, we are yet to see a daily close, which is what we would need to confirm that bullish intent is present around the weekly Quasimodo area mentioned above.
4hr Timeframe: Moving on to the 4hr timeframe, price is forming what we believe to be a potential bullish flag (red lines). Assuming that we’re correct here, price should eventually breakout north, likely taking out the 1.2800 number along the way.
A strong close above 1.2800 would, in our opinion, give us the confirmation to say that buying interest exists around the weekly Quasimodo resistance level mentioned above at 1.2765, thus supporting further buying. However, taking into consideration that we may see volatility hit this pair today; one needs to be prepared for the possibility of a move lower. If this occurs, we’ll be looking for supportive pressure to come into the market at a small 4hr decision-point demand area seen at 1.2698-1.2725. In the event that this area is breached however, we’ll then shift our attention to begin looking for shorting opportunities.
Current buy/sell orders:
- Buy orders: 1.2698-1.2725 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 1.2693).
- Sell orders: Flat (Predicative stop-loss orders seen at: N/A).
USD/CHF:
Weekly Timeframe: For the time being, buying and selling is taking place just below a major weekly supply area coming in at 1.0239-1.0131, which, as we’re sure you’re probably aware of, was the area at where the SNB fiasco began.
Daily Timeframe: Since Wednesday last week, price has been seen consolidating just below the weekly supply area mentioned above at 1.0239-1.0131. Should a selloff be seen from here, there is very little support seen in the market until price reaches a small daily decision-point demand area coming in at 0.9823-0.9873.
4hr Timeframe: Very little movement was seen on this pair yesterday, as a result, most of our previous analysis remains the same. With volatility expected in the markets later today, we’ll likely have more to discuss in tomorrow’s meeting.
At the time of writing, price is seen capped between the 1.0100 handle and a small, yet clearly resilient 4hr decision-point demand area seen at 0.9968-0.9998.
A break above 1.0100 could potentially open the doors for further upside towards a small 4hr supply area coming in at 1.0219-1.0187, which is, give or take a few pips, the point at where the humongous sell off begun on that dark day of January 15th. For anyone who is considering buying if a breakout north is seen here, please remain aware that you would likely be buying from higher-timeframe weekly sellers (see above) at that point.
Conversely, should price close below the aforementioned 4hr decision-point demand area, this would, in effect, be our cue to begin watching for price to retest this area as supply, since the path south would then likely be clear down to at least 0.9900.
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: The weekly timeframe shows that buying has entered the market, which could, given enough time, push the DOW back up to the 18098 level.
Daily Timeframe: From the daily picture, we can see that the DOW still remains consolidating between a daily decision-point demand area seen at 17561-17655, and a daily decision-point supply area coming in at 18029-17864.
4hr Timeframe: Following the rebound seen from the 4hr supply area at 18029-17971 (located deep within the aforementioned daily decision-point supply area), price sold off and formed a minor 4hr supply base coming in at 17951-17906. This, in effect, has provided an extra ‘defense’ for our live sell position taken at 17962, which has allowed us to comfortably move our stop to breakeven.
Current trading shows support coming into the market from around the 17280 mark, which could very well force the DOW to test our newly-formed 4hr supply base. Be that as it may, we’re still confident further selling will eventually be seen down towards the 4hr demand area positioned at 17623-17704 (final take-profit area). The reason for why is simply because (apart from 17280 now) we see very little active support left in the market.
Current buy/sell orders:
- Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
- Sell orders: 17962 [Live] (Predicative stop-loss orders seen at: breakeven).
XAU/USD (Gold):
Weekly Timeframe: Following the close below weekly demand at 1166.8-1195.0, we can see that the sellers have now retested this zone as supply, and are currently pushing price in the direction of the weekly decision-point demand level seen at 1136.3.
Daily Timeframe: The daily timeframe shows that (as reported it may do) further downside has been seen, which consequently forced the market down to just above a daily demand area coming in at 1131.4-1141.5.
4hr Timeframe: (A little revised from our previous analysis). Even with the recently deep spike seen at 1142.5, price is still effectively range bound on the 4hr timeframe in our opinion. Upper limits for this consolidation come in at 1165.1-1161.2, and the lower at 1147.3-1149.8.
Given that price is now bordering on the outskirts of the aforementioned daily demand area, and not too far from the weekly decision-point level seen a little lower at 1136.3, we are naturally more biased to longs at the moment. However, with the FOMC set to take the limelight today, anything could happen.
A push above this 4hr range could see price test the recently broken daily Quasimodo level at 1170.5, which, as far as we can see, could be a nice number to keep an eye on for selling opportunities today. A convincing close above 1170.5, however, would be our cue to begin watching for price to retest this level as support.
On the other hand, should price break lower today, a drive deeper into the aforementioned higher-timeframe supports (see above) will likely take place. It would be at this point our team would feel confident to begin watching the lower timeframes for buying confirmation.
Current buy/sell orders:
- Buy orders: 1131.4-1141.5 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 1130.0).
- Sell orders: 1170.5 [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this level).
