Quick update on the Euro

29 thg 5, 2015

Weekly view: The weekly timeframe shows us that relatively strong buying interest came into the market twenty or so pips from above a weekly demand area seen at 1.0519-1.0798. If the buyers remain in control here, we might see price shake hands with a weekly swap level coming in at 1.1051.

Daily view: From the daily scale, we can see that the rebound from the daily swap level 1.0819 extended higher during yesterday’s session, consequently driving the Euro pair deeper into a daily swap zone positioned at 1.1051-1.0918.

4hr view: The 4hr timeframe reveals that price broke above and retested 1.0900 during the course of yesterday’s sessions. The retest was confirmed with two healthy buying tails seen at 1.0875 and 1.0865, which as you can see pushed this pair up to just below a 4hr supply area seen at 1.1006-1.0976.

This area of 4hr supply is quite significant in our opinion, since it is where pro money likely made the decision to initially push below the daily swap area 1.1051-1.0918. Does this mean a reaction will likely be seen from here? We definitely believe it is possible. How much of a reaction though is very difficult to judge at this point. The reason we say this is simply because only 50 or so pips above this barrier sits a weekly swap level at 1.1051.

There are two ways in which we can handle this situation, well three if you include not trading. The first is watching how price reacts once/if it enters the limits of the 4hr supply area, if the you see resistance holding firm on the lower timeframes, it could be worth shorting this market. The second is to wait for this area to be broken, and enter short at the 1.1051 region. It will be trader dependent whether he/she waits for lower timeframe confirmation here or simply sets a pending sell order. We favor the former though since you never really know how strong a level is, or how deep a fakeout will be.

Levels to watch/live orders:

• Buys: Flat (Predicative stop-loss orders seen at: N/A).
• Sells: 1.0006-1.0976 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 1.1012) 1.1051 [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this level).