Weekly closing price: 0.9308
The weekly candles are in free fall right now. Literally, they look as though they were just pushed off of a cliff!
Registering its fourth consecutive weekly decline last week, the pair looks to be on course to continue driving south until we reach weekly support coming in at 0.9163 (not seen on the screen). Although this is an eye-opening decline, it is worth remembering that the US dollar index is seen trading from a monthly support at 88.50.
Leaving the daily Quasimodo support at 0.9233 unchallenged on Friday, the pair rotated back to the upside and retested a daily broken Quasimodo line at 0.9330. A topside breach of this level would likely bring about an extension up to daily resistance at 0.9444.
Friday’s optimistic US job’s numbers provided H4 buyers with enough fuel to cross back above the 0.93 handle. H4 sellers did attempt to pare recent gains and push lower following this move, but quickly found 0.93 was a defended barrier. To the left of current price, we have highlighted a collection of H4 selling wicks in green. This area, to us, resembles supply consumption (limited supply) and could signal a clear pathway north up to the H4 Quasimodo resistance at 0.9386, shadowed closely by the 0.94 handle.
Potential trading zones:
Since weekly and daily price continue to air vibes, additional candle confirmation is required around the 0.93 handle on the H4 timeframe, before it is a level we deem valid. Basically, what we’re looking for is a few more H4 rejection candles to form, before we can confidently say a correctional move up to 0.94/0.9386 is likely on the cards.
Data points to consider: US ISM non-manufacturing PMI at 3pm GMT .