Daily Market Analysis by IC Markets

USD/JPY:
4hr TF.

The lower (buffer) trendline along with the weak-looking demand area at 101.207 – 101.754, and the S/R weekly flip level at 101.328 have all been consumed on this timeframe, however do keep in mind the daily timeframe is yet to show a positive close lower as the candle has not closed. Price is currently reacting off of the underside of the daily demand area just mentioned above; this has yet to be proved as a supply/resistance area. In Monday’s analysis it was reported if a break below the daily demand area happens, to be prepared for buyers to come in at around 100.927/101.000 area, which may help facilitate a possible fakeout in the future.


[ul]
[li]Areas to watch for buy orders: 100.927/101.000.
[/li][li]Areas to watch for sell orders: 101.451 (underside of the trendline).
[/li][li]Most likely scenario: Price will likely retrace north from where is it currently trading, a likely area to be used could well be the underside of the weekly trendline that was just broken which may act as temporary resistance. A drop may then be seen to the fakeout area below at 100.927/101.000. The coming few days will give us more information regarding whether the daily demand area at 101.207 – 101.754 is truly consumed and is not just performing a fakeout.
[/li][li]
[/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

EUR/USD:
4hr TF.

In the last analysis, it was said traders should be aware that price may likely fakeout above supply (1) at 1.37309 – 1.36890 to the demand/supply flip area just above at 1.37487 – 1.37374. This nearly happened to the pip just missing the D/S flip area by about 3 pips or so,
Unfortunately, price still remains capped between the supply area just mentioned above at 1.37309 – 1.36890, and demand at 1.36434 – 1.36696, as we have yet to see a positive close either above supply or below demand. Once this close does happen, we’ll have an answer as to whether the black circled area was in actual fact a genuine break of daily demand at 1.36727 – 1.37313 or just a fakeout to push prices higher.


[ul]
[li]Areas to watch for buy orders: 1.36434 – 1.36696.
[/li][li]Areas to watch for sell orders: 1.37309 – 1.36890, 1.37487 – 1.37374.
[/li][li]Most likely scenario: Price is currently seen trading at the round number 1.37000, right in the middle of where price is capped (supply 1.37309 – 1.36890 and demand (1.36434 – 1.36696). Either supply or demand can be tested from where price is currently trading at, not forgetting the possibility of another fakeout above supply (levels above) to the demand/supply flip area at 1.37487 – 1.37374, so trades on the lower timeframes around the cap limits may present low-risk, high-reward opportunities, but remain aware a positive break may happen at any time, especially with the FOMC meeting at 6pm GMT later today.
[/li][/ul]

GBP/USD:
4hr TF.

Price did exactly as expected; buyers clearly did run out of opposing traders to sell to at the high: 1.68383. Sellers brought price back to the demand area below at 1.67835 – 1.68062, but this time trading deeper within the zone towards the round number 1.68000 where near-term buyers were waiting. Price then took off north, just missing the supply area that’s currently capping price at 1.68824 – 1.68714 by around 6 pips.


[ul]
[li]Areas to watch for buy orders: 1. 67835 – 1.68062, 1.68000.
[/li][li]Areas to watch for sell orders: 1.68824 – 1.68714.
[/li][li]Most likely scenario: The last weekly analysis on Monday showed that price on the weekly timeframe recently broke above long-term consolidation at 1.67980 – 1.42273 and is currently retesting the top as support. The daily timeframe showed support was seen at around the low of 1.67622. Right now on the 4hr timeframe, price is trapped/capped between supply at 1.68824 – 1.68714 and demand at 1.67835 – 1.68062. Taking all the above on board, price is likely to rally higher today, with the possibility of breaking the 4hr supply area just mentioned. For this to happen, price will need to positively close above the high 1.68383 to reach this supply zone, however, do remain aware that sellers may still be active around this supply area (levels above).
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AUD/USD:
4hr TF.

The sellers were on fire yesterday, and certainly took no prisoners! The minor demand area at 0.93186 – 0.93345 was completely consumed, and is now a supply area worth watching for future trading opportunities. At the time of writing, the sellers seem to be consuming the 4hr demand area noted to watch yesterday at 0.92570 – 0.92745, which is also the upper limit of a daily demand area at 0.92054 – 0.92649, as a result, a retracement may be possible.
New areas added:

[ul]
[li]Supply area: 0.93729 – 0.93592.
[/li][li]Demand area: (bottom of daily demand) 0.92037 – 0.92203.
[/li][li]
[/li][/ul]


[ul]
[li]Areas to watch for buy orders: Daily demand (0.92054 – 0.92649), 0.92037 – 0.92203.
[/li][li]Areas to watch for sell orders: 0.93186 – 0.93345, 0.93729 – 0.93592, 0.93000.
[/li][li]Most likely scenario: Price will likely see a retracement here due to price entering daily demand at 0.92054 – 0.92649 as mentioned above, and also traders who were short from above using this area to liquidate their positions. Sellers are likely to be seen in and around the minor demand/supply flip area and the newly-formed supply area above (0.93186 – 0.93345….0.93729 – 0.93592), but do not discount the possibility of a reaction at the round number 0.93000 just below these areas. Be that as it may, do keep a close eye on the demand area below at 0.92037 – 0.92203 for a possible spike down during the FOMC announcement today.
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USD/JPY:
Daily TF.

On the daily timeframe , we can see price is yet to make a positive close below daily demand and the lower (buffer) trendline (101.207 – 101 – 754) marked with a gold x sign.

4hr TF.

Price, as reported did react around the area of the broken trendline acting as resistance, but has not yet visited the fakeout zone below at 100.927/101.000. If we saw price close above the high (black circle) 101.674, this may confirm that price breaking the daily demand area at 101.207 – 101.754 was in fact a fakeout, but only time will tell.


[ul]
[li]Areas to watch for buy orders: 100.927/101.000.
[/li][li]Areas to watch for sell orders: 101.674.
[/li][li]Most likely scenario: Price is in a very difficult area on the chart to give an accurate likely scenario, because we don’t at this point in time have much to go on concerning possible direction, due to price currently trading in and around a weak daily demand area at 101.207 – 101.754. For the fakeout (marked with a green circle) below the daily demand area to be confirmed, we need to see the high of 101.674 be consumed, if that’s the case, pro money may use the possible fakeout area below (labeled on the chart) at 100.927/101.000 for a rally. Nonetheless, if price consumes the fakeout area just mentioned with a positive close below, this will tell us that the daily demand area has been well and truly consumed, thus lower prices will be expected.
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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

EUR/USD:
4hr TF.

Technically, nothing has changed since the last analysis. Price still remains capped between supply at 1.37309 – 1.36890 and demand at 1.36434 – 1.36696. Pro money has performed fakeouts (black and brown circles) at both areas just mentioned; making it very difficult to see which fakeout is genuine, as no opposing area has been consumed. Sellers are currently battling it out with the buyers in the lower demand area (levels above); could we see a break below?


[ul]
[li]Areas to watch for buy orders: 1.36434 – 1.36696.
[/li][li]Areas to watch for sell orders: 1.37309 – 1.36890.
[/li][li]Most likely scenario: This pair is becoming problematic of late to give a likely scenario, as no area has been consumed yet (Supply: 1.37309 – 1.36890 Demand: 1.36434 – 1.36696). There may be some lower-timeframe opportunities within this range area, but in all honesty, it would be best to wait until a positive break is seen, that way we have more options available to us.
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GBP/USD:
4hr TF.

Beautiful! Price did exactly as expected. The high 1.68383 was consumed, then buyers rallied price up and consumed the 4hr supply area above at 1.68824 – 1.68714, forcing price to test the round number 1.69000 just above. The buyers and sellers are currently battling it out around the newly-formed supply/demand flip area at 1.68714 – 1.68824 and the round number just mentioned above.


[ul]
[li]Areas to watch for buy orders: 1.68714 – 1.68824.
[/li][li]Areas to watch for sell orders: 1.69963 – 1.69514.
[/li][li]Most likely scenario: Price has already closed slightly above the round number 1.69000 and left a strong wick above, meaning a lot of sellers were stopped out. We will likely see price meander between the supply/demand flip area (1.68714 – 1.68824) and the round number (level above), before making a positive close higher. The reasoning behind this is there are no obstacles above until the newly-formed daily supply area at 1.69963 – 1.69514. Take a look at the two black circles around this area, these may indicate supply consumption, so price should, on a positive close above the round number, be able to rally higher with little difficulty
[/li][/ul]
.

AUD/USD:
4hr TF.

Little retracement has been seen so far on this pair, other than a small reaction at a 4hr demand area at 0.92037 – 0.92203, which is located deep within a daily demand area at 0.92054 – 0.92649. I do hope some of our traders took advantage of that beautiful supply area above, which started the down leg at 0.94253 – 0.94040.

[ul]
[li]Areas to watch for buy orders: 0.92037 – 0.92203, 0.92000, and 0.91446.
[/li][li]Areas to watch for sell orders: 0.92745 – 0.92570.
[/li][li]Most likely scenario: Price is currently reacting to the demand area noted in the last analysis at 0.92037 – 0.92203. We will likely see price spike through this demand area as there is a round number (0.92000) just below, no doubt jam packed with buyers and breakout sellers. This may give pro money enough liquidity to buy into (sell stops from the buyers and sells orders from the breakout sellers), to rally price up to at least the demand/supply flip area at 0.92745 – 0.92570. However, if a positive close below the round number happens, it is likely that price will drop to the daily S/R flip level at 0.91446.
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USD/JPY:
Daily TF.

At the time of writing, it looks as though we may be seeing a fakeout taking place. Take a look at the tail the current daily candle produced marked with a black circle, poetry in motion!

4hr TF.

Don’t you just love it when price moves with energy! As reported in yesterday’s analysis, pro money may use the fakeout area at 100.927/101.000 to rally prices higher; price did just that, leaving a small tail behind stopping out any traders who had their stops to close. A reaction is currently happening at the lower (buffer) weekly trendline which was recently broken, now acting as temporary resistance.


[ul]
[li]Areas to watch for buy orders: 100.927/101.000.
[/li][li]Areas to watch for sell orders: 101.674, 102.365 – 102.128, 102.000.
[/li][li]Most likely scenario: If price can consume the high marked with a black circle at 101.674, then this would likely confirm the fakeout from below, allowing price to rally to the next supply area at 102.365 – 102.128 with the round number lurking below at 102.000. Traders should remain aware, pro money may retrace price from where it is currently trading back to the fakeout area B below to collect more liquidity by stopping traders out who moved their stops to breakeven to rally price higher.
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This is my view on UJ.

Oh H4 and daily a trend line has been broken, and price has pulled back to the breakout level, one of two things could happen in my opinion.
It will either make a pull back from the break out area (where we are now) to the neckline and from the neckline, we can decide if to buy or not. I wouldn’t want to be buying just now until we would get further confirmation with price action above 101.089 on H4. It is looking pretty weak currently on H4, but the candle hasn’t closed yet, so can’t really comment.

Neckline area around marked trend lines on chart.

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

EUR/USD:
4hr TF.

This pair has made some progress since the last analysis was completed, however a break is yet to be seen where price is presently capped (Supply: 1.37309 – 1.38690, Demand: 1.36434 – 1.36696). The lower base limit of the supply area just mentioned is currently holding price down, and at the time of writing, appears very bearish, as sellers are selling price relatively hard at the moment.


[ul]
[li]Areas to watch for buy orders: 1.36434 – 1.36696, Daily demand (1.34770 – 1.35557).
[/li][li]Areas to watch for sell orders: 1.37309 – 1.36890.
[/li][li]Most likely scenario: Since price has found some resistance at the lower base limit of supply (1.36890) within where price is currently capped (Supply: 1.37309 – 1.38690, Demand: 1.36434 – 1.36696), sellers are likely to take this opportunity in breaking the lower 4hr demand area (levels above). If this does happen, look for buyers to come into the market at around the daily demand area at 1.34770 – 1.35557 (marked with a gold thumbs up seen on Monday’s weekly analysis) which is also deep within a weekly demand area at 1.34770 – 1.36837.
[/li][/ul]

GBP/USD:
4hr TF.

Little action was seen on the pound yesterday compared to the previous day’s trading action. So far, the sellers are winning the battle between the round number resistance at 1.69000 and the supply/demand flip area below at 1.68714 – 1.68824. Price is currently reacting off of the high, circled in black, as acting support at 1.68647.


[ul]
[li]Areas to watch for buy orders: 1.68317 – 1.68427.
[/li][li]Areas to watch for sell orders: 1.69000, 1.69963 – 1.69514.
[/li][li]Most likely scenario: Price will likely drop to a minor demand area below at 1.68317 – 1.68427, before attempting to make a positive close above the round number 1.69000. The reasoning behind higher prices (as explained in yesterday’s analysis) is there are no obstacles above until the newly-formed daily supply area at 1.69963 – 1.69514. Take a look at the two black circles around this area, these may indicate supply consumption, so price should, on a positive close above the round number, be able to rally higher with little difficulty.
[/li][/ul]

AUD/USD:
4hr TF.

Price was expected to rally from the demand area at 0.92037 – 0.92203 to at least the demand/supply flip area at 0.92745 – 0.92570, which did happen. Price, however, did not spike down through the demand area to the round number 0.92000, clearly pro money had enough sell orders (liquidity) to buy into already.


[ul]
[li]Areas to watch for buy orders: 0.92037 – 0.92203, 0.92000, and 0.91446.
[/li][li]Areas to watch for sell orders: 0.92745 – 0.92570.
[/li][li]Most likely scenario: This pair is now capped between demand at 0.92037 – 0.92203 incorporating the round number 0.92000 just below, and supply at 0.92745 – 0.92570. A break below demand is likely to happen due to price reacting bearishly at the weekly S/R flip level (seen on Monday’s weekly analysis) at 0.93718, and the daily demand area at 0.92054 – 0.92649 being weak thanks to the multiple deep moves within the area consuming buyers. If price does break below today, watch for buyers to come into the market at around the daily S/R flip area at 0.91446, paying special attention to the black circled area on the lower left area of the chart, this is a very important decision point (0.91542 – 0.91741).
[/li][/ul]

USD/JPY:
4hr TF.

The high of 101.674 has now been completely consumed with a positive close above, the fakeout below the daily demand area at 101.207 – 101.754 has likely been confirmed now. Extra selling pressure is being seen at the broken weekly trendline now acting as resistance. Price has recently reacted off of a decision point (demand) at 101.355 – 101.472, the reason it is a decision point is because this is where price made the decision to consume the high mentioned above. On a side note, it’s always a fantastic confidence boost to see newly-formed demand areas supporting the market if one is already long.

[ul]
[li]Areas to watch for buy orders: 101.355 – 101.472, 100.927/101.000.
[/li][li]Areas to watch for sell orders: 102.000, 102.365 – 102.128.
[/li][li]Most likely scenario: A retrace still may be seen here past the newly-formed decision point at 101.355 – 101-472. The retrace may bring price back to around the fakeout area at 100.927/101.000, so do be prepared for this. Price will likely rally up to at least the round number 102.000, before meeting the supply area just above at 102.365 – 102.128.
[/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.

Regarding the last weekly forecast, it was reported that a deeper push down into weekly demand at ([1]1.34770 – 1.36837) was likely. This deeper push was seen last week, but do still be on your guard for active buyers within this demand area even though it’s not fresh.

Price still remains capped between the demand area just mentioned and supply at 1.42470 – 1.38580.

Daily TF.

The Daily timeframe shows the buy orders around the low 1.36432 were consumed on Friday, closing the market near the daily lows at 1.36321. The break of this low may have given us a possible direction for this week, allowing price to drop down to the next demand area at 1.34770 – 1.35557.

However, look at the daily USDX chart (above), notice the difference between the daily Euro chart? There’s no positive close above supply (80.65 – 80.49) on the USDX, whilst the Euro closed below a support (low - 1.36432). So, any traders thinking of selling this breakout may be best to hold fire for a day or two to see what unfolds, as a retracement may yet happen. The USDX is a great tool to add to your trading arsenal to determine a genuine break to a fakeout.

4hr TF.

Price has completely consumed the 4hr demand area at 1.36696-1.36432, just below daily demand at 1.36727 – 1.37313. This break below the 4hr demand area confirms that the lower black circle was indeed not a fakeout of the daily demand area just mentioned; it was consumption, on this timeframe. Likewise, the two brown circles above 4hr supply at ([1] 1.37309 – 1.38690) were likely fakeouts.

Price has reacted off of broken 4hr demand B[/B] now acting as supply, and has a clear path down to a new demand area at 1.35623 – 1.35984 which was not clearly seen on the daily timeframe (shown on chart 2).

Chart 1:


Chart 2:

[ul]
[li]Areas to watch for buy orders: 1.35623 – 1.35984, 1.36000.
[/li][li]Areas to watch for sell orders: 1.36696-1.36432.
[/li][li]Most likely scenario: Depending on how the correlation between the USDX and the Euro plays out, price will likely use the demand/supply flip area at 1.36696-1.36432 to push prices down to a recently-seen 4hr demand area at 1.35623 – 1.35984 with the round number just above at 1.36000, as it appears there’s little buyers/demand left to stop price. Nonetheless, do not expect anything much today as both the Brits and the Americans have bank holidays.
[/li][/ul]

GBP/USD:
Weekly TF.

Price is still currently trading between the weekly supply area at 1.76290 – 1.70490 and the top of the consolidation area, which is resistance now acting support at 1.67980.

Sellers were clearly more active last week seen in the medium-sized wick, though, could not maintain a close below the previous weekly candle’s close. No confirmation as to whether price is simply faking out above the long-term consolidation area at 1.67980 – 1.42273, or attempting a continuation move, only time will tell.
Let’s see what information the lower timeframes can give us.

Daily TF.

The low 1.67622 provided a great area to go long a while back, and is currently supporting the market. Price attempted to test the newly-formed daily supply area at 1.69963 – 1.69514, but fell short at 1.69210.

Price is currently capped between supply at 1.69963 – 1.69514 and the low at 1.67622. We saw pro money consume the buy orders at the low just mentioned, so there is little to stop price from dropping to the daily S/R flip level sometime this week at 1.66630, which will be the most likely course price will take on this timeframe, as price is yet to reach the daily supply area above at 1.69963 – 1.69514.

4hr TF.

This timeframe shows a much clearer view of price action. As per Friday’s analysis it was expected that price would likely react at the minor demand area at 1.68317 – 1.68427, this did not happen, and the area got consumed resulting in price being capped between a newly-formed supply at 1.68752 – 1.68558 and demand at 1.67835 – 1.68062, incorporating the round number 1.68000 within.


[ul]
[li]Areas to watch for buy orders: 1.67835 – 1.68062.
[/li][li]Areas to watch for sell orders: 1.68752 – 1.68558.
[/li][li]Most likely scenario: Price will likely remain trading within where price is presently capped (Supply: 1.68752 – 1.68558, Demand: 1.67835 – 1.68062) as low volume is expected today due to both the UK and U.S being on holiday.
[/li][/ul]

AUD/USD:
Weekly TF.

Wow! Would you look at that reaction off of the weekly S/R flip area at 0.93718, absolutely beautiful. The last weekly analysis reported a weak bullish close above the previous week’s candle body around 3 pips or so. Presently, the buyers are showing little interest as little to no reaction was seen on the timeframe.

This section is definitely worth remembering from the last weekly forecast:

We still have to consider where would be the likely profit targets for pro money. It is doubtful it would be above to supply as the R:R is not big enough from where price is currently trading. The demand – fakeout zone below is more reasonable at 0.86601 – 0.88258.

Daily TF.

Well, as for the supply area 0.94468 – 0.93758 being weak, it certainly did not show any weakness yet! Strong sellers really took over the market last week. Buyers were seen at around the daily demand area (0.92054 – 0.92649), keeping price capped between both of these areas.

A break below this demand area could force price to test the daily S/R flip level below at 0.91446.

A break above daily supply (levels above) could still see price testing fresh daily supply at 0.95434 – 0.94862 as reported in the weekly forecast completed on the 12th May.

4hr TF.

No break was seen on Friday between where price is currently capped (Supply: 0.92745 – 0.92570 Demand: 0.92037 – 0.92203 [including the round number 0.92000 just below]), which is deep within daily demand at 0.92054 – 0.92649, appearing weak due to the amount of deep touches seen.

If a break lower happens, price has very little to stop it from reaching the 4hr decision point (demand) at 0.91542 – 0.91741 with the daily S/R flip level just below at 0.91446.

Likewise, if a break above happens, there’s little in the way to stop buyers pushing price up to the minor demand/supply flip area at 0.93345 – 0.93186.

[ul]
[li]Areas to watch for buy orders: 0.92037 – 0.92203, 0.92000.
[/li][li]Areas to watch for sell orders: 0.92745 – 0.92570
[/li][li]Most likely scenario: As already mentioned, the U.K and the U.S are on holiday today, so price will likely trade within where price is currently capped (Supply: 0.92745 – 0.92570 Demand: 0.92037 – 0.92203).
[/li][/ul]

[B]USD/JPY:
Weekly TF.[/B]

Much the same as the last weekly analysis, another close below the weekly trendline was seen, and again, no close below the weekly S/R flip level (101.328). Last week price attempted to close below, but the buyers remained too strong for the sellers, resulting in a neat tail left behind.

[B]Daily TF.[/B]

It appears from this timeframe a fakeout has occurred; notice how the tail marked with a gold circle did not break the low 100.754 to the left marked with a black circle. Price closed at 101.915 with a small reaction seen at the broken weekly trendline acting as temporary resistance. At the time of writing, even with the fakeout below, price still remains capped between daily supply at [B]104.842 – 104.174[/B] and daily demand at [B]101.207 – 101.754.[/B]

[B]4hr TF.[/B]

Price action shows more information on this timeframe. Price did partly as expected; a rally to at least the round number 102.000 was seen, with weekly trendline confluence. Price, however, did not retrace back to the fakeout area below at [B]100.927/101.000[/B] before rallying, instead minor demand at [B]101.335 – 101.472[/B] supported price for the rally.

Take a look at the two brown circles, these areas are likely where pro money retraced price to fill left-over buy orders, thus consuming most of the demand (buyers) at the base and just above minor demand ([B]101.335 – 101.472[/B]), so in the future price should slide through here with ease trading deeper within this area.

[ul]
[li]Areas to watch for buy orders: 101.335 – 101.472.
[/li][li]Areas to watch for sell orders: 102.365 – 102.128, 102.000
[/li][li]Most likely scenario: Price will not likely see much volatility today due to the bank holidays today (as already mentioned). Trading will likely occur within where price is currently capped (Supply: 102.365 – 102.128, Demand: 101.335 – 101.472).
[/li][li]
[/li][/ul]

The chart levels and zones will be color coded for the benefit of readers as follows:
Weekly TF = [B]Black.[/B] Daily TF = Gold. 4hr TF = Brown

[B]EUR/USD:
4hr TF.[/B]

As reported yesterday, the Brits and the Americans were both on holiday, leaving very little to talk about technically. At the open, price gapped down, and faked the low 1.36157, before heading up to the 4hr demand/supply flip area at[B] 1.36696 – 1.36432,[/B] incorporating the daily support , now acting resistance at 1.36432 within. If price does see a reaction south here today, the most likely near-term target would be at the demand area below at [B]1.35623 – 1.35984[/B] with the round number 1.36000 just above.


[ul]
[li]Areas to watch for buy orders:[B] 1.35623 – 1.35984, 1.36000.[/B]
[/li][li]Areas to watch for sell orders: [B]1.36696 – 1.36432.[/B]
[/li][li]Most likely scenario: Much the same as yesterday’s analysis, pro money will likely use the demand/supply flip area at [B]1.36696-1.36432[/B] to push prices down to the recently-noted 4hr demand area at 1.35623 – 1.35984 with the round number just above at 1.36000, as it appears there’s very little buyers/demand left to stop price.
[/li][/ul]