Welcome to IC Markets’ daily Market Analysis thread. Here we will be sharing detailed Technical Analysis written by our Experts covering the Four Majors EUR/USD, AUD/USD, GBP/USD & USD/JPy .
Please feel free to leave any feedbacks or ask any questions related to the analysis.
The charts levels and zones will be color coded for the benefit of readers as follows:
Weekly TF = Black.*Daily TF = *Gold.*4hr TF =Brown
EUR/USD:
Daily TF.
Previous 52-week/Monthly and Weekly highs (1.38934/1.39060/1.38892) stood no chance today with the bulls in full force.
A supply area at 1.39669 – 1.39317 has been identified, where a bearish reaction is currently being seen, but not with conviction. It is doubtful the selling pressure will be able to overcome the buyers, even if a retrace does persist.
The round number 1.40000 is so close; traders can smell the liquidity lurking around it. Expect serious sellers to be waiting here as a lot of traders around the world will be watching this figure. With so much attention around this small area, and the expectation of a reversal here, what will Pro money be thinking? A guess would be to try and gain as much liquidity for a big move in their favor. This big figure will not only have sellers waiting, but also buyers attempting to buy the breakout. A supply area above marked with a check at 1.42443 – 1.41146 is a perfect area to facilitate a fakeout of this big number. Swing traders trying to fade the area will have their stops 20 to 30 pips above the figure on average, these stops will be buy orders if/once they are triggered. Pro money will then sell into the buy stops in small batches of orders not allowing price to move too far from their entries. The supply zone above will just add fuel to the selling pressure for the fakeout to be completed.
So do keep a watchful eye on the big figure and the Daily supply area above it which is within weekly supply at 1.42445 – 1.38589 as mentioned on the weekly outlook analysis.
Demand on this timeframe is still seen at the S/R flip area at 1.37974, this was the last place serious buyers came into the market.
Here is just a reminder of how beautiful the supply marked with a check looks in history, who would not want to trade this area??
4hr TF.
After rallying for 2 consecutive 4hr candles up to Daily supply (levels above), price action shows buyers were totally in control for most of the day yesterday.
On this timeframe, two demand areas are worth noting down , the first, a decision point for price rally up to supply which is the highest of the two marked with an x,at 1.38709 – 1.38798 , and below, the demand area and origin of the whole rally at 1.38709 – 1.38798.
Either 2 of these demand areas may have active buyers waiting if price retraces far enough, so as always, trade with caution.
[ul]
[li]Areas to watch for buy orders: 1.38709 – 1.38798, 1.38709 – 1.38798, 1.37974[/li][li]Areas to watch for sell orders: 1.42443 – 1.41146, 1.40000, 1.42443 – 1.41146 [/li][li]Most likely scenario: Price will likely not see much reaction at the current Daily supply as most of the supply has been consumed previously. A touch of the 1.40000 is expected very soon.[/li][/ul]
GBP/USD:
4hr TF.
As reported in the last analysis, if price was to shoot north, the next supply is at 1.70372 – 1.69811, which is within Daily supply (1.70372 – 1.68747). Price is currently reacting near the big figure 1.70000 within the 4hr supply area.
A break of this supply would not only be breaking 4hr area, but the daily too. Price would then be entering major supply on the Weekly timeframe at 1.76290 – 1.70420 as shown on Monday’s weekly outlook.
Similar to the Euro, there are 2 obvious demand areas below for price to react to, if a drop happens. The lowest of the two is not a fresh level at 1.68069 – 1.68280, the next demand higher up is a decision point on this timeframe to take price deeper into supply at 1.68522 – 1.68729.
If a decline does take place, there is very little to stop price getting to the near-term demand zones highlighted above.
A quick reminder of how the supply areas look on the higher timeframe.
[ul]
[li]Areas to watch for buy orders: 1.68069 – 1.68280, 1.68522 – 1.68729
[/li][li]Areas to watch for sell orders: 1.70000, 1.70372 – 1.69811
[/li][li]Most likely scenario: Price will likely see a retracement here, so do set alerts near the mentioned near-term demand areas.
[/li][/ul]
AUD/USD:
4hr TF.
The minor consolidation between the S/R flip level at 0.93124 and demand (0.92029 – 0.92299) has been broken. The upper limit (S/r flip level) was challenged as reported, the spike up was to clear out the remaining sellers for the rally to supply at 0.93784 – 0.93751.
Price is currently testing this very supply area at the time of writing which was reported may happen. Nonetheless, a deeper move into supply is expected due to the S/R weekly flip level at 0.93718 and fresh 4hr supply at 0.94232 – 0.09040 with the round number just below (0.94000). This is coupled with being surrounded by daily supply at 0.94466 – 0.93777.
If price resolves south reacting from supply, we have support which was previous resistance at 0.93124 where a reaction may be seen, if only for a bounce, then down to the decision point of the rally at 0.92580 – 0.92746 for a bigger reaction.
This pair has not changed much medium term, and still remains capped either side between Daily supply at 0.94466 – 0.93777 and demand at 0.92037 – 0.92825 which can be clearly seen on the 4hr timeframe below.
[ul]
[li]Areas to watch for buy orders: 0.93124, 0.92580 – 0.92746
[/li][li]Areas to watch for sell orders: 0.93718, 0.94232 – 0.09040, 0.94000
[/li][li]Most likely scenario: Price will likely push deeper into supply to find more sellers before making any kind of retracement, if any.
[/li][/ul]
USD/JPY:
Daily TF.
A reminder of the higher timeframe price action:
No change has been seen to either supply at 104.831 – 104-121 or demand at 101.236 – 101.769 which has capped price either side.
At the time of writing the bears have been selling hard into daily demand (levels above), do not forget though, there’s also a powerful weekly S/R flip level at 101.328 currently with trendline confluence, so a break of this demand area will not be easy.
4hr TF.
The minor consolidation was broken south, a reaction off of a small S/R flip level at 102.128 was enough for the bears to break the 4hr range (Supply = 103.067 – 102.734 Demand = 101.847 – 102.026).
As reported a break south may happen. Why did price only need a small S/R flip (level above) to break quite an important area? The reason may have been because pro money did the hard work beforehand marked with a check on the chart. This demand area was penetrated deep, consuming most of the willing buyers there, so all the big guys had to do was start selling into all these willing buyers in small chunks, once all those buyers dried up and price reached a minor level of supply – BOOM! No more buyers, pro money loaded up = big move south.
Price is reacting to an area of demand at 101.536 deep within daily demand (levels above) which was reported to watch in yesterday’s analysis. This could see price make a short rally to supply which was prior demand at 102.026 – 101.847 as a short-term target.
[ul]
[li]Areas to watch for buy orders: 101.536
[/li][li]Areas to watch for sell orders: 102.026 – 101.847
[/li][li]Most likely scenario: Price will likely push a little deeper south at the current demand level 101.536 to stop out traders who were long, pro money will then use the sell stops to buy into to push price higher to supply at either 102.026 – 101.847 or the small S/R flip level at 101.132.
[/li][/ul]
The charts levels and zones will be color coded for the benefit of readers as follows:
Weekly TF = Black. Daily TF = Gold. 4hr TF = Brown
EUR/USD:
4hr TF :
Even though a reaction is being seen at daily supply (1.39669 – 1.39317) buyers and sellers have still not decided on a direction, resulting in price action not moving much since the last analysis
1.40000 is still fresh supply and waiting to be challenged, a break above this level could force prices to test daily supply at 1.42443 – 1.41146.
Near-term demand is seen at the round number 1.39000 along with the previous monthly high which was prior resistance, now becoming possible support at 1.39060.
The 2 demand areas mentioned in the last analysis should still be watched carefully as a touch is yet to happen. The first, the highest of the two, marked with an x is at 1.38709 – 1.38798. The lower demand, the origin of the previous rally at 1.38122 – 1.38295 (These levels should have been on the last analysis – apologies!), which also contains the previously weekly low within it at 1.38122. Out of the 2 demand areas the origin normally provides the biggest reaction, so if you do trade the higher of the two demands; make sure your risk is in check!
[ul]
[li]Areas to watch for buy orders: 1.39000, 1.39060, 1.38709 – 1.38798 Trade here with caution, 1.38122 – 1.38295
[/li][li] Areas to watch for sell orders: 1.39669 – 1.39317, 1.40000, 1.42443 – 1.41146
[/li][li] Most likely scenario: Price will likely test either of the demand areas below, as it is currently seen consuming sellers at daily supply, but will more than likely head for the origin
[/li][/ul]
GBP/USD:
4hr TF.
Very similar to the Euro, a weak bearish reaction at 4hr supply (1.70372 – 1.69811) is currently happening: more so near the big round number 1.70000 on this pair.
Price is deep within daily supply at 1.70372 – 1.68747, a lot of buyers have been consumed with the 2 prior momentum candles. If a break above this supply is seen, price will be entering huge weekly supply at 1.76290 – 1.70420, this could be important for any traders long the market with the current uptrend, as this could be a place where serious sellers show their strength.
Demand is much the same as the last analysis of the pair. The higher of the two, marked with an x is at 1.68522 – 1.68729 could see a nice reaction. The demand area directly below at 1.68069 – 1.68280 is not a fresh area, but was used during the NFP announcement, and holds a previous weekly low within at 1.68224, so there may still be unfilled orders left.
Be aware there is also closer demand than already mentioned, but not deemed as strong. There is previous monthly (1.69009) and weekly (1.69198) high levels along with the round number 1.69000 which made a cluster resistance. These levels got consumed with the recent rally. This cluster of levels may become support if price retraces far enough.
Nothing much has changed regarding price having room to move lower, there are currently no demand/buyers until the round number cluster support.
[ul]
[li]Areas to watch for buy orders: 1.68522 – 1.68729, 1.68069 – 1.68280, 1.69009, 1.69198, and 1.69000.
[/li][li] Areas to watch for sell orders: 1.70372 – 1.69811, 1.70000.
[/li][li] Most likely scenario: Price will likely test lower demand, the round number cluster support area (1.69000) will likely see a bounce, before faking this level to real demand at 1.68522 – 1.68729. Do keep an eye on the big round number 1.70000 for shorts as we have not yet formally touched this level.
[/li][/ul]
AUD/USD :
4hr TF.
A deeper move into 4hr supply (0.93784 – 0.93751) has not been seen yet as expected.
The S/R flip level at 0.93124 is seeing a reaction as expected. This is supported with a prior weekly high resistance, turned support at 0.93167. At the time of writing, price is once again caught within a mini range between recent supply and the S/R flip level below (levels above). A break above may see price testing fresh supply at 0.94232 – 0.09040, conversely a break below may see demand (0.92580 – 0.92746) being tested.
A point that needs emphasizing here and which could be used in the future relates to the bearish approach price action took before reaching the minor S/R flip level. Look at the bearish candles; notice the ones with long wicks forming almost pin-bar like formations? This is pro money clearing minor lower timeframe supply areas whilst price is still dropping. The reason this is done is to allow a clear path for more bullish price action with little selling pressure to stop it.
[ul]
[li] Areas to watch for buy orders: 0.93124, 0.93167, 0.92580 – 0.92746.
[/li][li] Areas to watch for sell orders: 0.93784 – 0.93751, 0.94232 – 0.09040.
[/li][li] Most likely scenario: Price will likely consolidate within the temporary range providing lower timeframe traders the opportunity to scalp the limits, until a decision is made to break.
[/li][/ul]
USD/JPY:
4hr TF.
An area of demand at 101.536 that was reported a few days ago to be attentive of has seen a reaction. Nonetheless, if your stop was too tight, you may have been stopped out on this one, with that crafty spike down.
The near-term target which was prior demand, now acting supply at 102.026 – 101.847 was hit, and is where price is trading at the time of writing.
Similar to the Aussie, this pair is now within minor consolidation between demand at 101.536 and supply (102.026 – 101.847).
Remembering we are within a daily timeframe consolidation as well (Supply: 104.831 – 104.121 Demand: 101.236 – 101.769). If price decides to go southbound, the previous monthly lows (101.325) accompanied with the huge S/R weekly flip level (101.328) is the next point of trouble for the bears. If price breaks north, the bulls have to contend with selling pressure from the minor S/R flip level at 102.128
All things considered, price is still in daily demand with a weekly S/R flip level within (levels above); so long trades are more viable at this point.
[ul]
[li] Areas to watch for buy orders: 101.536, 101.325, and 101.328.
[/li][li] Areas to watch for sell orders: 102.026 – 101.847, and 101.132.
[/li][li] Most likely scenario: Price will likely consolidate within the temporary range providing lower timeframe traders the opportunity to scalp the limits, until a decision is made to break.
[/li][/ul]
The charts levels and zones will be color coded for the benefit of readers as follows:
Weekly TF = Black.*Daily TF =*Gold.*4hr TF =*Brown
EUR/USD:
Daily TF.
A quick look at what recent price action shows us on this timeframe. Price has consumed more sellers within weekly supply at 1.42445 – 1.38589. This could be because one of two things or even both going on here:
[ul]
[li]Long-term trend traders who were long the market in the current uptrend may think this is a good opportunity to unload some of their positions and begin taking profit.
[/li][li]This could be Pro money sellers loading their first shorts into the market.
[/li][/ul]
4hr TF.
Look at that wick completely clearing sellers from daily supply at 1.39669 – 1.39317, this wick made a high of 1.39909! Another 10 pips and price would have been trading at the big figure 1.40000. What does this wick portray? It tells traders this is a strong area of supply where more sellers are likely to be waiting with their unfilled orders. One can imagine the emotional disappointment caused by traders missing their entry by a few pips as price selfishly turns just before the entry level.
Near-term demand at the round number 1.39000, coupled with the previous monthly high at 1.39060 saw a small reaction, but nothing that would have been worth trading.
The demand area marked with an x at 1.38709 – 1.38798 has now been completely consumed; remember in the last analysis, it was reported to trade this area with caution as the origin normally provides the best reaction.
Next demand on the hit list for the sellers is at 1.38122 – 1.38295 which is also the previous weekly low at 1.38122. Be that as it may, we are still in weekly supply (levels above) and higher timeframes normally supersedes the lower, so be aware fellow traders!
Could this bearish momentum be the start of a long-term trend change, or are we still in for higher prices? As the sellers have been cleared out at daily supply above (levels above) price most certainly can rally higher. Time will tell as there are yet some strong demand areas to be consumed before any type of downtrend commences.
[ul]
[li]Areas to watch for buy orders: 1.38122 – 1.38295
[/li][li]Areas to watch for sell orders: 1.40000
[/li][li]Most likely scenario: Price will likely begin retracing here, seeing some short-term profit taking. A test of the demand at 1.38122 – 1.38295 is likely to happen before a visit to the big figure 1.40000.
[/li][/ul]
GBP/USD:
4hr TF.
The pound has been very sluggish these past 2 days, technically there’s not much to add that was not said in the last analysis, a reminder will not hurt though.
Price is currently deep within daily supply at 1.70372 – 1.68747, a break above will see price entering weekly timeframe supply at 1.76290 – 1.70420.
Price reacted off of the 4hr supply area at 1.70372 – 1.69811 nearly hitting the big figure level at 1.70000. Sellers have not exactly showed enthusiasm in taking prices lower just yet. It appears from current price action that pro money may be in the middle of consuming minor lower timeframe supply areas for a possible move up, the tell-tale sign is the wicks that show up, while price is still dropping.
The near-term demand is seen at the round number 1.69000 coupled with previous monthly/weekly high levels at 1.69009/1.69198 which could act as support in the future. This cluster support area mentioned above could however be a nice level for pro money to fakeout price to the next demand area marked with an x at 1.68552 – 1.68729.
[ul]
[li]Areas to watch for buy orders: 1.69000, 1.69009/1.69198, 1.68552 – 1.68729.
[/li][li]Areas to watch for sell orders: 1.70372 – 1.69811, 1.70000.
[/li][li]Most likely scenario: Price will likely push down deeper to collect buyers, the round number cluster support (levels above) may see a reaction, however do be prepared for a fakeout at that level to demand marked with an x (levels above).
[/li][/ul]
AUD/USD
The last report emphasized that pro money may be clearing the path for bullish price action, and we have recently seen this happen. Price used the cluster support area at 0.93124 (S/R flip level) and the previous weekly high at 0.93167 to rally prices higher.
The minor consolidation (supply: 0.93784 – 0.93751 demand: 0.93124 – 0.93167) has been broken north, with price just missing supply at 0.94232 – 0.09040 by 8-9 pips, making a high of 0.93942.
Bear in mind price is still within daily timeframe consolidation (supply: 0.94466 – 0.93777 demand: 0.92037 – 0.92825) and we are now in the upper limits of that consolidation.
A test of the near-term 4hr supply area at 0.94232 – 0.09040 coupled with the round number 0.94000 just below should happen soon, however judging by the current state of the daily supply area (levels above), the reaction may not be that strong and may only see prices retrace to minor demand (0.93124 – 0.93345) above the small S/R flip (level above), thus a break above is likely in the near future.
[ul]
[li]Areas to watch for buy orders: 0.93124 – 0.93345
[/li][li]Areas to watch for sell orders: 0.94232 – 0.09040, 0.94000
[/li][li]Most likely scenario: Price will likely test the near-term 4hr supply area at 0.94232 – 0.09040 and may push prices down into minor demand at 0.93124 – 0.93345.
[/li][/ul]
USD/JPY:
4hr TF.
Not much has changed technically with this pair. Price is still within minor consolidation with demand at 101.536 and supply at 102.026 – 101.847. Keeping in mind we are also in daily timeframe consolidation as well (Supply: 104.831 – 104.121 Demand: 101.236 – 101.769) and currently trading within the lower limits of this range.
With all things being considered, long trades are more viable at this point. This however does not mean price will not break south out of the minor consolidation to collect much-needed liquidity for a possible push up. The most obvious place for this to occur is below, using the previous monthly lows at 101.325 coupled with the weekly S/R flip level at 101.328 along with weekly trendline confluence. A break above the minor consolidation may see price test the minor supply S/R flip level at 102.128.
[ul]
[li]Areas to watch for buy orders: 101.536 (near-term demand), 101.325, 101.328.[/li][li]Areas to watch for sell orders: 102.026 – 101.847, 102.128.[/li][li]Most likely scenario: Price will likely test near term demand at 101.536 again, it is doubtful there will be many buyers left there, so push deeper to test the previous monthly lows/weekly SR flip area (101.325/101.328) is expected.[/li][/ul]
The chart levels and zones will be color coded for the benefit of readers as follows:
Weekly TF = Black. Daily TF = Gold. 4hr TF = Brown
U.S dollar index: for correlation purposes.
EUR/USD:
Weekly TF.
What a beautiful site that is! Compare the price action over the last 3 weeks to the weekly candle just closed, a complete engulf was seen with the market closing at 1.37605. Could we see a move down to demand area 1 at 1.34770 – 1.36837? This is very possible, although do be aware after a big engulfing candle appears such as this, a retracement is normally seen, so we may see price move back to the base of supply at 1.42470 – 1.38580, as per this timeframe.
Could last week’s bearish price action be the start of a downtrend? This is a question that may well be answered in the coming weeks.
A quick note of the demand zones below:
[ul]
[li]Demand area 2 at 1.32953 – 1.34954 is not a fresh zone, meaning some of the buyers have already been consumed, however this area still may contain active buyers.
[/li][li] Demand are 3 at 1.31047 – 1.32272 is a fresh zone. Out of all 3 zones, this will more than likely provide the biggest reaction if/when price reaches here.
[/li][/ul]
Daily TF.
Friday’s price action well and truly sealed the deal that sellers have taken control for the time being. The low of 1.37734 marked with a circle was completely consumed and stopped out most traders trying to go long around the Daily S/R flip level at 1.37931. This is not a good sign for buyers here as this was a strong level that created the higher high at 1.39909.
A fakeout was seen at supply (1.39669 – 1.39342) clearing sellers out and taking (buy) stops from traders trying to sell, and buy orders from traders attempting to buy the breakout. This obviously gave pro money enough liquidity (buy orders) to sell into without even having to manipulate the big figure 1.40000.
Even with the fakeout above, price still remains capped between supply at 1.39669 – 1.39342 and demand at 1.36727 – 1.37313, and we have yet to see a full break.
The USDX provides a great way to add confluence to a trade. The Euro faked an area of daily supply, just missing weekly supply by a few pips (levels above), and the USDX faked a weekly support level at 79.12 to rally prices higher. There was a subtle difference though on Friday’s daily close, the Euro showed a break of an S/R flip level (level above) whilst no break was seen on the USDX (S/R flip level - 79.96), more of a slight reaction. This may mean the Euro is due for a retracement, or it may mean the USD is due to appreciate and break the S/R flip area just mentioned, this week will definitely provide the answer, but be aware of this close inverse correlation.
4hr TF.
The origin/demand area at 1.38122 – 1.38286 marked number 1 got consumed relatively easy on Friday; however not before a little hesitation zone was formed marked with an arrow. The demand area that was consumed will now act as supply for possible future trading opportunities, much the same for the demand marked with an x at 1.38722 – 1.38795.
Supply number (2) and demand number (3) (1.37941 – 1.37712 ….1.37374 – 1.37487) are interesting. The market showed us buyers came in on the last 4hr candle at demand area 3. Pin-bar traders be aware! Although this may look like a fantastic pin bar, all this could really mean is pro money taking partial profits from the leg down, furthermore, if you were to go long on the break of this pin bar where would the next target area likely be? It would be supply area number 2! Not the best risk-to-reward, would you not agree?
If a break of demand area 3 is seen next week, look for more buying pressure to enter the market, as price would’ve entered daily demand (levels above), which in turn is just above weekly demand area 1 (as shown above). So, with all things considered the Euro should be quite interesting this week.
[ul]
[li]Areas to watch for buy orders: 1.36727 – 1.37313.
[/li][li] Areas to watch for sell orders: 1.37941 – 1.37712, 1.38122 – 1.38286.
[/li][li] Most likely scenario: Price will likely be contained within demand area number 3 and supply area number 2, during the low-volume sessions. When Europe/London opens, price may break to the downside, however before doing that price may spike supply which was previous demand at number 1 for liquidity to move price deeper into daily demand (all levels area above).
[/li][li]
[/li][/ul]
GBP/USD:
Weekly TF.
This timeframe shows that buyers attempted to touch base with upper supply at 1.76290 – 1.70490, but failed in their conquest. The weekly candle just closed shows sellers were in control of the market for most of the previous week’s trading as price closed within the body of the previous weekly candle. Take a look at the past 4 weekly candles, every weekly candle closed above the previous candle’s close; this is very significant as last week we did not see this happen.
Areas noted on the charts for reference:
[ul]
[li]Weekly consolidation zone: 1.67980 – 1.42273.
[/li][li] S/R flip area within the consolidation zone: 1.62710.
[/li][/ul]
Daily TF.
Since the last weekly analysis, price has rallied hard into daily supply at 1.70410 – 1.68880 and consumed lots of sellers in the process. The most obvious place for near-term demand with likely buyers waiting on this timeframe is the S/R flip area at 1.66630. If price were to get down to this demand area, a break of the daily trendline would be in order, so it will be interesting to see what develops if that is the case.
4hr TF.
The drop from 4hr supply (1.70410 – 1.69840) was absolutely beautiful, and so it should be considering price was within daily supply (levels above) and just 30 to 40 pips away from weekly supply (levels above).
Sellers were too strong for the buyers at demand marked with an x (1.68536 – 1.68725) as it had higher timeframe power with the down move, all buyers were consumed in the process, price has yet to reach demand just below it at 1.68072 – 1.68260. This may be a nice area for a bounce as this is the demand area pro money used during and a little after the NFP announcement this month.
Price is currently caught in a small area between supply which was previous demand at 1.68536 – 1.68725 and demand at 1.68072 – 1.68260.
With all that being said, do be very careful about taking any long trades on this timeframe, even though the current daily trend is up as we are very near weekly supply which is not to be taken lightly.
[ul]
[li]Areas to watch for buy orders: 1.68072 – 1.68260, 1.66630
[/li][li] Areas to watch for sell orders: 1.70410 – 1.69840, 1.68536 – 1.68725 (previous demand, now supply)
[/li][li] Most likely scenario: Price will likely meander between near-term supply and demand (levels above) testing both areas during the low-volume sessions. When Europe/London opens we may see a break north as swing traders lock in gains from the recent down leg, price has now consumed demand marked with an x (levels above) so price is free to hit the next fresh demand, but before this happens price may retrace back to the origin of the down leg which is the 4hr supply (1.70410 – 1.69840) to collect more liquidity for a bigger move down.
[/li][/ul]
AUD/USD:
Weekly TF.
As reported in the last weekly analysis, higher prices may be seen, judging by the mild reaction off of the weekly S/R flip level B,[/B] and this did happen last week. Price is now currently trading around this important area, with the market closing at 0.93585.
If price decides to go north, the risk to reward for long-term traders is not good enough due to supply at 0.97576 – 0.95718. A drop in price is more likely as there’s bigger room for profit with a logical demand area below at 0.86601 – 0.88258, nonetheless, price is still capped by the zones just mentioned.
Let’s go down a timeframe to if there are any more clues as to which direction price may take this week.
Daily TF.
Price action saw a lot more movement last week compared to the week before.
It took a while but price eventually reacted off of demand at 0.92054 – 0.92649 and made its way to supply at 0.94468 – 0.93758. This supply however is weak due to a spike through the zone made back on the 10/04/14 consuming most of the sellers. So at the time of writing price is still capped between these two areas (levels above).
If a break is seen above, we may see price rally further this week to fresh supply at 0.95434 – 0.94862 as per this timeframe before any drop is seen.
Considering the weekly chart shows price at a strong resistance (S/R flip area), and fresh daily supply is seen just above (levels above), it makes sense for price to rally a little bit to collect more liquidity before any move down is seen. This will stop out a lot of traders trying to short the weekly area giving pro money their stops (buy orders) to sell into, not forgetting breakout traders’ buy orders there also!
4hr TF.
Just to recap, we are currently within weak daily supply (levels above). Price on this timeframe is capped between minor demand at 0.93186 – 0.93345 and supply at 0.94253 – 0.94040.
A break below could see price testing demand at 0.92570 – 0.92745 which would effectively bring price back to the lower limits of the daily timeframe consolidation (levels above)
A break above, which is what is likely to happen could trigger further bullish buying activity towards fresh daily supply (levels above) as discussed when analyzing the daily timeframe .
[ul]
[li]Areas to watch for buy orders: 0.93186 – 0.93345, 0.92570 – 0.92745
[/li][li]Areas to watch for sell orders: 0.94253 – 0.94040, 0.95434 – 0.94862
[/li][li]Most likely scenario: Price will likely trade between supply and demand highlighted for the lower-volume sessions, once volatility picks up price may break upper supply at 0.94253 – 0.94040. Before this happens though a break of demand (0.93186 – 0.93345) may be seen to collect liquidity for the push up. Traders should be cautious trading where price is currently capped as a break is expected soon.
[/li][/ul]
USD/JPY:
Weekly TF.
Last week’s price action saw a drop in value making an overall weekly low of 101.431, 10 or so pips away from the actual S/R flip level at 101.328 with trendline confluence.
A reaction was seen around this area, but it is very difficult to see the full value of this reaction due to price trading in and around this level for 14 weeks now with no real movement suggesting bullish activity, other than providing long-term support for the market presently.
Long-term areas to note:
[ul]
[li]Supply at 110.650 – 108.360.
[/li][li]Demand at 96.564 – 98.231.
[/li][/ul]
Daily TF.
Similar to the last weekly analysis conducted, price has not moved much this week at all.
Price still remains capped between supply at 104.842 – 104.174 and demand at 101.207 – 101.754.
The demand area just mentioned has had three touches already, each time, demand/buyers are weakened, so be very cautious going long around this level for the time being.
If we do see a break of this demand area, this will prove significant as price will not only be breaking daily demand, it will also be breaking a weekly S/R flip level (levels above) and a weekly trendline. The next area of demand below is at 99.571 – 100.132 which also holds the big figure 100.000, so do note this level down for future buying opportunities if a break is seen.
4hr TF.
With the daily timeframe analysis reporting to be cautious of going long around the current daily demand area, the 4hr timeframe price action seems to agree (at the time of writing).
Demand at 101.536 has proved itself, however the reactions seen do not display serious buying interest. Look at the two arrows on the chart below, these tails may show pro money consuming small demand areas for a possible move down.
With all things being considered, price is still capped between supply which was prior demand at 102.017 – 101.865 and demand at 101.536. A break above (fakeout) supply to the S/R flip level at 102.128 is still not out of the question, as this could facilitate liquidity requirements for a bigger move down i.e. buy orders for pro money sell orders. Nonetheless, even though long trades are currently not advised here, we still have strong support with the weekly S/R flip level (levels above) within daily demand which is the last area within daily demand where strong buyers may be waiting, so be careful out there traders!
Areas to note:
[ul]
[li]Supply area 1: 104.129 – 103.816
[/li][li] Supply area 2: 103.055 – 102.742
[/li][/ul]
[ul]
[li]Areas to watch for buy orders: 101.536, 101.328 (Weekly S/R flip level).
[/li][li]Areas to watch for sell orders: 102.017 – 101.865, 102.128
[/li][li]Most likely scenario: Price will likely react a little off of supply at 102.017 – 101.865 before making a push up to the S/R flip level at 102.128, to load up for the big push down. The weekly S/R flip level at 101.328 is expected to provide support within daily demand.
[/li][/ul]
The charts levels and zones will be color coded for the benefit of readers as follows:
Weekly TF = Black. Daily TF = Gold. 4hr TF = Brown
EUR/USD:
4hr TF.
Yesterday’s price action was particularly sluggish, and has so far done as expected. Price still remains capped between 4hr demand at 1.37374 – 1.37487 and 4hr supply at 1.37941 – 1.37712.
This pair is currently trading within a higher timeframe daily range (supply: 1.39669 – 1.39342, demand 1.36727 – 1.37313) coupled with a daily S/R flip level at 1.37931 just above the 4hr supply area just mentioned, never forget the higher timeframes as it may be disastrous to your accounts one day!
[ul]
[li]Areas to watch for buy orders: 1.36727 – 1.37313 (Daily demand area)
[/li][li] Areas to watch for sell orders: 1.37941 – 1.37712, 1.38286 - 1.38122.
[/li][li] Most likely scenario: The most likely scenario has not changed much since the last analysis was undertaken. price may break south, however before doing that price will likely spike supply which was previous demand (1) (1.38286 - 1.38122), this will possibly stop out some daily timeframe traders attempting to go short at the daily S/R flip level B[/B]. The reasoning behind this is because pro money requires orders to move the markets. For price to drop to daily demand, pro money will require buy orders to sell into, they get these much-needed orders by pushing price up, allowing lower timeframe traders to see this momentum and to jump on board this new trend as it will appear on the lower timeframes, thus creating buy orders (liquidity), additionally, the daily S/R flip area may have big sell orders waiting with buy stops just above, this would be gratefully accepted by pro money.
[/li][/ul]
GBP/USD:
4hr TF.
This pair shows price breaking the temporary range (supply: 1.68536 – 1.68725 demand: 1.68072 – 1.68260) during the more volatile sessions as was reported may happen in the last analysis. The break above may be swing traders locking in profits from the previous move down.
The chart below shows how price is currently reacting off of the round number 1.69000, with near-term demand seen below at 1.68333 – 1.68513. Nonetheless, do be careful here as this may be just a ‘dummy’ demand area used for a fakeout that would hit the stop orders of traders who were buying there. These stops, usually set just below the lower limits of the area would give pro money more liquidity (sell orders) to facilitate/assist pro money buy orders below at demand (1.68072 – 1.68260) along with daily trendline confluence.
If a break above this round number is seen, this would enable pro money to get price back up to the origin of the drop seen from the 4hr supply area (1.70410 – 1.69840) to collect more liquidity for a possible bigger move down.
[ul]
[li]Areas to watch for buy orders: 1.68072 – 1.68260.
[/li][li] Areas to watch for sell orders: 1.69000, 1.70410 – 1.69840.
[/li][li] Most likely scenario: Price will likely trade between acting supply at 1.69000 and newly-formed demand at 1.68333 – 1.68513 during lower-volume sessions. Once volatility picks up today, we may see a spike down through this demand to the lower demand at 1.68072 – 1.68260.
[/li][/ul]
AUD/USD:
4hr TF.
Technically, there’s little change to this pair. Monday’s price action was lethargic to say the least managing to move around 36 pips or so at the time of writing.
Price remains capped between supply at 0.94253 – 0.94040 and minor demand at 0.93186 – 0.93345 along with a 4hr S/R flip level just below at 0.93167.
Do bear in mind, we are currently within a weak daily supply area at 0.94468 – 0.93758 due to a spike consuming sellers seen on the 10/04/14, it may be a good idea to give short orders a miss until a direction has been shown.
[ul]
[li]Areas to watch for buy orders: 0.93186 – 0.93345, 0.92570 – 0.92745
[/li][li] Areas to watch for sell orders: 0.94253 – 0.94040, 0.95434 – 0.94862
[/li][li] Most likely scenario: Much the same as yesterday, price will likely trade between supply and demand (supply: 0.94253 – 0.94040 demand: 0.93186 – 0.93345) during the lower-volume sessions. Once volatility picks up price may break upper supply at 0.94253 – 0.94040. Before this happens though a break of demand (0.93186 – 0.93345) may be seen to collect liquidity from buyers’ stops for the push up. Traders should be cautious trading where price is currently capped as a break is expected very soon.
[/li][/ul]