Well done to those who bought 109.80...
For those who read Tuesday’s technical briefing you may recall the team highlighted the 161.8% H4 Fib ext. at 109.80 as a possible buy (in the technical domain, this is considered an ‘alternate AB=CD pattern’ [developed by Scott Carney]). We liked this level due to the following:
• Fused closely with a H4 channel support (taken from the low 110.73).
• Weekly movement, as you can see, remains toying with a trend line resistance-turned support (taken from the high 123.57). Having seen this line hold firm as resistance on a number of occasions in the past, it’s likely to remain a defensive barrier going forward.
• In conjunction with weekly flow, an AB=CD formation (black arrows) recently completed around the 127.2% Fib ext. point at 109.91, which happens to be positioned nearby a Quasimodo support at 109.55 (green area).
As is evident from the H4 chart, 109.80 responded beautifully in recent trade and produced a 70+-pip move. Well done to any of our readers who managed to jump aboard this train.
Moving forward, we can see the H4 candles are en route to retesting the 110 handle after topping just above the 110.50 neighborhood. Should 110 reject price action, July’s opening level at 110.65 will likely be the next stop.
Areas of consideration:
Ultimately, the market is likely watching 110 this morning. A H4 full or near-full-bodied bullish candle printed from this region would be considered a strong buy signal (stops can be positioned below the rejecting candle’s tail), owing to where we are coming from on the higher timeframes. As highlighted above, the first upside target from 110 will likely be July’s opening level on the H4 timeframe at 110.65.
Today’s data points: US existing home sales; FOMC meeting minutes.
• Fused closely with a H4 channel support (taken from the low 110.73).
• Weekly movement, as you can see, remains toying with a trend line resistance-turned support (taken from the high 123.57). Having seen this line hold firm as resistance on a number of occasions in the past, it’s likely to remain a defensive barrier going forward.
• In conjunction with weekly flow, an AB=CD formation (black arrows) recently completed around the 127.2% Fib ext. point at 109.91, which happens to be positioned nearby a Quasimodo support at 109.55 (green area).
As is evident from the H4 chart, 109.80 responded beautifully in recent trade and produced a 70+-pip move. Well done to any of our readers who managed to jump aboard this train.
Moving forward, we can see the H4 candles are en route to retesting the 110 handle after topping just above the 110.50 neighborhood. Should 110 reject price action, July’s opening level at 110.65 will likely be the next stop.
Areas of consideration:
Ultimately, the market is likely watching 110 this morning. A H4 full or near-full-bodied bullish candle printed from this region would be considered a strong buy signal (stops can be positioned below the rejecting candle’s tail), owing to where we are coming from on the higher timeframes. As highlighted above, the first upside target from 110 will likely be July’s opening level on the H4 timeframe at 110.65.
Today’s data points: US existing home sales; FOMC meeting minutes.
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