EUR/USD: Technical outlook and review.
4hr TF.
The higher-timeframe picture resembles the following:
• Weekly TF: At the time of writing, a break below the weekly demand area at 1.32940-1.34847 has been seen. The path south, on this timeframe appears clear down to the weekly demand area at 1.31037-1.32262 which may be hit very soon.
• Daily TF: Yet another impressive full-bodied bearish candle has formed. We are still watching for a retrace north back up to the daily level of interest at 1.33559, but at the time of writing, it seems that we may not see this and price will just continue on down to the daily demand area at 1.31037-1.31755 (which is conveniently located within weekly demand - see above).
The sellers have broken below the round number 1.33, leaving any traders attempting to go long there very little choice but to cover their position. Buying interest was then seen around the 4hr decision-point level at 1.32758, this did not last long though, and any traders who went long there (like us) would have been lucky to come out at breakeven on this one.
The situation to the far left of current price shows the path is very likely clear down to at least a 4hr demand area at 1.31559-1.31879, which is located just within the aforementioned daily demand area, and deep within the aforementioned weekly demand area. Do be aware though, just below this is another 4hr demand area, and in our opinion looks even better at 1.31037-1.31278 (again located within the aforementioned higher-timeframe demand areas).
If pro money’s intent is to bring price that far down, they will need liquidity to do so in the form of buy orders to sell into, so pro money may buy into price here (they likely have enough sell orders to buy into from all the traders recently stopped out – stops in this case were sell orders once hit) pushing back up to the 4hr decision-point level at 1.32758 for a retest, before pushing price south once again. However do be prepared that with effort, pro money may push higher to either the round number 1.33 or even the 4hr D/S flip area at 1.33360-1.33619, where we’ll set P.A confirmation sell levels under each area (1.32731/1.32973/1.33322) as it is very difficult to tell which area will react at this point in time.
Pending orders/P.A confirmation levels:
• The pending buy order (Green line) set just above the 4hr decision-point level (1.32758) at 1.32798 has been stopped out.
• The P.A confirmation buy level (Red line) set just above the round number 1.33 at 1.33046 has been removed since price has dropped too far from the entry level.
• No pending sell orders (Green line) are seen in the current market environment.
• New P.A confirmation sell levels (Red line) are seen just below the 4hr decision-point level (1.32758) at 1.32731. The reason for not placing a pending sell order here is simply because price could ignore this level and trade on up to the round number 1.33 above.
• New P.A confirmation sell levels (Red line) are seen just below the round number 1.33 at 1.32973. The reason for not placing a pending sell order here is simply because price could ignore this level and trade on up to the 4hr D/S flip area above at 1.33360-1.33619.
• New P.A confirmation sell levels (Red line) are seen just below the 4hr D/S flip area (1.33360-1.33619) at 1.33322. The reasoning behind setting a P.A confirmation sell level here and not a pending sell order is because we have no logical area for a stop-loss order meaning price could push straight through this area.
The higher-timeframe picture resembles the following:
• Weekly TF: At the time of writing, a break below the weekly demand area at 1.32940-1.34847 has been seen. The path south, on this timeframe appears clear down to the weekly demand area at 1.31037-1.32262 which may be hit very soon.
• Daily TF: Yet another impressive full-bodied bearish candle has formed. We are still watching for a retrace north back up to the daily level of interest at 1.33559, but at the time of writing, it seems that we may not see this and price will just continue on down to the daily demand area at 1.31037-1.31755 (which is conveniently located within weekly demand - see above).
The sellers have broken below the round number 1.33, leaving any traders attempting to go long there very little choice but to cover their position. Buying interest was then seen around the 4hr decision-point level at 1.32758, this did not last long though, and any traders who went long there (like us) would have been lucky to come out at breakeven on this one.
The situation to the far left of current price shows the path is very likely clear down to at least a 4hr demand area at 1.31559-1.31879, which is located just within the aforementioned daily demand area, and deep within the aforementioned weekly demand area. Do be aware though, just below this is another 4hr demand area, and in our opinion looks even better at 1.31037-1.31278 (again located within the aforementioned higher-timeframe demand areas).
If pro money’s intent is to bring price that far down, they will need liquidity to do so in the form of buy orders to sell into, so pro money may buy into price here (they likely have enough sell orders to buy into from all the traders recently stopped out – stops in this case were sell orders once hit) pushing back up to the 4hr decision-point level at 1.32758 for a retest, before pushing price south once again. However do be prepared that with effort, pro money may push higher to either the round number 1.33 or even the 4hr D/S flip area at 1.33360-1.33619, where we’ll set P.A confirmation sell levels under each area (1.32731/1.32973/1.33322) as it is very difficult to tell which area will react at this point in time.
Pending orders/P.A confirmation levels:
• The pending buy order (Green line) set just above the 4hr decision-point level (1.32758) at 1.32798 has been stopped out.
• The P.A confirmation buy level (Red line) set just above the round number 1.33 at 1.33046 has been removed since price has dropped too far from the entry level.
• No pending sell orders (Green line) are seen in the current market environment.
• New P.A confirmation sell levels (Red line) are seen just below the 4hr decision-point level (1.32758) at 1.32731. The reason for not placing a pending sell order here is simply because price could ignore this level and trade on up to the round number 1.33 above.
• New P.A confirmation sell levels (Red line) are seen just below the round number 1.33 at 1.32973. The reason for not placing a pending sell order here is simply because price could ignore this level and trade on up to the 4hr D/S flip area above at 1.33360-1.33619.
• New P.A confirmation sell levels (Red line) are seen just below the 4hr D/S flip area (1.33360-1.33619) at 1.33322. The reasoning behind setting a P.A confirmation sell level here and not a pending sell order is because we have no logical area for a stop-loss order meaning price could push straight through this area.
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