Our take on the Euro so far...
Weekly view: Last week’s trading action saw the Euro market close at 1.1261 – a mere seventeen pips below a clear area of weekly supply coming in at 1.1532-1.1278. Therefore, for anyone considering longs on this pair this week, you may want to take a note of this. This supply zone, at least to us anyway, is a very significant hurdle (held price lower since the 11th May) since if there’s a sustained break above this area, our long-term bias (currently short) on this pair will very likely shift north.
Daily view: From this angle, however, we can see that after price connected with the lower limits of a daily Quasimodo cluster zone at 1.1390/1.1421 (located relatively deep within the aforementioned weekly supply area) on Wednesday, price reverted into what we like to call a mid-range phase. Essentially, all this means is that price is currently trading in no man’s land between the aforementioned daily Quasimodo cluster zone and a daily swap area seen in yellow at 1.1051-1.1000.
4hr view: The open 1.1209 saw price gap down 52 pips, placing the Euro only a few pips above round-number support at 1.1200.
Large weekend gaps such as this tend to get filled pretty quickly. And we’re sure that most would agree that the obvious place to try and take a long is around 1.1200. That said though, if you look just below this number, you’ll see a 4hr Quasimodo support level in green at 1.1181. This is where we have placed our buy order – 1.11845 to be exact, with a stop set just below 1.11474. Round numbers tend to see fakeouts from time-to-time; this to us is a hunt for liquidity i.e. stops. What we’re essentially trying to do here is catch this stop hunt by entering below the psychological number. Our target, if our order gets filled, will be set just below the 4hr Quasimodo resistance level in red (1.1276) at 1.12698.
In addition to the above, we believe that between 1.1276 and the round number just above it at 1.1300 is a great place to look for (lower timeframe) confirmed sells into this market today if price should reach this high. The reason we say this is simply because of where price is located on the weekly timeframe at the moment (see above – weekly supply). If we time the entry short correctly, we could be in for a nice ride south this week down to at least the 4hr demand area coming in at 1.1048-1.1096, which sits just above the yellow daily swap area at 1.1051-1.1000.
Levels to watch/live orders:
• Buys: 1.11845 (Stop loss: 1.11474).
• Sells: 1.1276/1.1300 [Tentative – confirmation required] (Stop loss: dependent on where one confirms this area).
Daily view: From this angle, however, we can see that after price connected with the lower limits of a daily Quasimodo cluster zone at 1.1390/1.1421 (located relatively deep within the aforementioned weekly supply area) on Wednesday, price reverted into what we like to call a mid-range phase. Essentially, all this means is that price is currently trading in no man’s land between the aforementioned daily Quasimodo cluster zone and a daily swap area seen in yellow at 1.1051-1.1000.
4hr view: The open 1.1209 saw price gap down 52 pips, placing the Euro only a few pips above round-number support at 1.1200.
Large weekend gaps such as this tend to get filled pretty quickly. And we’re sure that most would agree that the obvious place to try and take a long is around 1.1200. That said though, if you look just below this number, you’ll see a 4hr Quasimodo support level in green at 1.1181. This is where we have placed our buy order – 1.11845 to be exact, with a stop set just below 1.11474. Round numbers tend to see fakeouts from time-to-time; this to us is a hunt for liquidity i.e. stops. What we’re essentially trying to do here is catch this stop hunt by entering below the psychological number. Our target, if our order gets filled, will be set just below the 4hr Quasimodo resistance level in red (1.1276) at 1.12698.
In addition to the above, we believe that between 1.1276 and the round number just above it at 1.1300 is a great place to look for (lower timeframe) confirmed sells into this market today if price should reach this high. The reason we say this is simply because of where price is located on the weekly timeframe at the moment (see above – weekly supply). If we time the entry short correctly, we could be in for a nice ride south this week down to at least the 4hr demand area coming in at 1.1048-1.1096, which sits just above the yellow daily swap area at 1.1051-1.1000.
Levels to watch/live orders:
• Buys: 1.11845 (Stop loss: 1.11474).
• Sells: 1.1276/1.1300 [Tentative – confirmation required] (Stop loss: dependent on where one confirms this area).
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