Potential longs from 110.76...
Beginning this morning’s report with a look at the weekly timeframe, we can see that the unit is ranging between supply at 115.50-113.85 and demand at 108.13-108.95. Along similar lines, daily price is also seen sandwiched between support coming in at 110.76 and resistance at 111.91.
Looking across to the H4 candles, the market failed to generate much follow through buying above July’s opening level at 112.09 yesterday, and went on to aggressively trade lower. The move, influenced by the Fed’s decision to leave interest rates unchanged, saw price take out multiple H4 supports, before ending the day closing just ahead of the 111 handle.
Our suggestions: On account of the above notes, this is how we are looking at this market right now. The 111 handle will likely possess willing buyers who will place stops 10-20 pips beneath this number. Below 111 is June’s opening level at 110.83, shadowed closely by a Quasimodo support at 110.76. Take note that this Quasimodo also aligns perfectly with the current daily support. So, given the stops (sell stops from both buyers looking to long 111 and also sellers looking to sell the breakout) planted beneath 111, we feel the big boys will breach 111 today and look to attack the 110.76 neighborhood for a trade long. The only grumble we have here, of course, is the fact that weekly price provides little support until we reach the 108.95 region. Despite this, we still feel the odds of a bounce being seen from the 110.76 level is relatively high.
Therefore, we have placed a pending buy order at 110.77, with a stop pegged below the Quasimodo apex at 110.60. With this position requiring a 17-pip stop and the first take-profit target being set at 111, this gives us over one times our risk to the first target on this trade.
Data points to consider: US Core durable goods numbers and US Weekly unemployment claims at 1.30pm GMT+1.
Looking across to the H4 candles, the market failed to generate much follow through buying above July’s opening level at 112.09 yesterday, and went on to aggressively trade lower. The move, influenced by the Fed’s decision to leave interest rates unchanged, saw price take out multiple H4 supports, before ending the day closing just ahead of the 111 handle.
Our suggestions: On account of the above notes, this is how we are looking at this market right now. The 111 handle will likely possess willing buyers who will place stops 10-20 pips beneath this number. Below 111 is June’s opening level at 110.83, shadowed closely by a Quasimodo support at 110.76. Take note that this Quasimodo also aligns perfectly with the current daily support. So, given the stops (sell stops from both buyers looking to long 111 and also sellers looking to sell the breakout) planted beneath 111, we feel the big boys will breach 111 today and look to attack the 110.76 neighborhood for a trade long. The only grumble we have here, of course, is the fact that weekly price provides little support until we reach the 108.95 region. Despite this, we still feel the odds of a bounce being seen from the 110.76 level is relatively high.
Therefore, we have placed a pending buy order at 110.77, with a stop pegged below the Quasimodo apex at 110.60. With this position requiring a 17-pip stop and the first take-profit target being set at 111, this gives us over one times our risk to the first target on this trade.
Data points to consider: US Core durable goods numbers and US Weekly unemployment claims at 1.30pm GMT+1.
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