Potential long from the H1 demand base at 0.7882-0.7895?
Weekly gain/loss: -2.29%
Weekly closing price: 0.7920
Engulfing approximately two weeks’ worth of gains last week, weekly price shaped a strong-looking full-bodied weekly bearish candle. The move, as you can see, has firmly placed the 2018 yearly opening level seen on the weekly timeframe at 0.7801 back in view.
Turning the focus to the daily timeframe, the daily support area at 0.7986-0.7951 (now acting resistance area) was taken out in strong fashion last week, opening the gates for price to challenge the daily support area coming in at 0.7897-0.7870, and quite possibly the daily demand at 0.7807-0.7841 (sited just ahead of the 2018 yearly opening line).
A quick recap of Friday’s movement on the H4 timeframe shows that the commodity-linked currency aggressively moved to the downside in response to stellar US job’s data. The H4 Quasimodo support at 0.7979 was obliterated, leaving the unit free to test lower prices. As highlighted on the chart, the next downside targets can be seen at the 0.79 handle, shadowed closely by a H1 demand base at 0.7882-0.7895.
Potential trading zones:
The noted H1 demand, in our technical view, is attractive. This is largely due to it being positioned directly beneath the 0.79 handle (stop-loss orders plotted beneath 0.79 will, when filled, become sell orders which provide liquidity for those looking to buy), and is also seen located within the walls of the daily support area at 0.7897-0.7870.
For those considering a long from this boundary, you may want to consider placing stops below the surrounding DAILY support area, rather than the H4 zone. This will help avoid a fakeout.
Ultimately, the first take-profit target should be kept reasonably close by (0.7950 looks like a possible candidate at current price) since let’s not forget that weekly price shows room to press lower!
Data points to consider: Chinese Caixin services PMI at 1.45am; US ISM non-manufacturing PMI at 3pm GMT.
Weekly closing price: 0.7920
Engulfing approximately two weeks’ worth of gains last week, weekly price shaped a strong-looking full-bodied weekly bearish candle. The move, as you can see, has firmly placed the 2018 yearly opening level seen on the weekly timeframe at 0.7801 back in view.
Turning the focus to the daily timeframe, the daily support area at 0.7986-0.7951 (now acting resistance area) was taken out in strong fashion last week, opening the gates for price to challenge the daily support area coming in at 0.7897-0.7870, and quite possibly the daily demand at 0.7807-0.7841 (sited just ahead of the 2018 yearly opening line).
A quick recap of Friday’s movement on the H4 timeframe shows that the commodity-linked currency aggressively moved to the downside in response to stellar US job’s data. The H4 Quasimodo support at 0.7979 was obliterated, leaving the unit free to test lower prices. As highlighted on the chart, the next downside targets can be seen at the 0.79 handle, shadowed closely by a H1 demand base at 0.7882-0.7895.
Potential trading zones:
The noted H1 demand, in our technical view, is attractive. This is largely due to it being positioned directly beneath the 0.79 handle (stop-loss orders plotted beneath 0.79 will, when filled, become sell orders which provide liquidity for those looking to buy), and is also seen located within the walls of the daily support area at 0.7897-0.7870.
For those considering a long from this boundary, you may want to consider placing stops below the surrounding DAILY support area, rather than the H4 zone. This will help avoid a fakeout.
Ultimately, the first take-profit target should be kept reasonably close by (0.7950 looks like a possible candidate at current price) since let’s not forget that weekly price shows room to press lower!
Data points to consider: Chinese Caixin services PMI at 1.45am; US ISM non-manufacturing PMI at 3pm GMT.
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