Opening movement Monday fell sharply, reclaiming 0.95 to the downside, with sellers remaining in the driving seat until reaching 0.94, which held ground, bolstered by a rebound from lows of 97.45 in the US dollar index. As evident from the H4 timeframe, the short-term trend exhibits an upward trajectory, north of 0.92, with a break back above 0.95 laying the basis for a move to 0.96 and a 61.8% Fibonacci retracement at 0.9598, closely shadowed by March and February’s opening levels at 0.9627 and 0.9636, respectively.
Weekly Quasimodo support at 0.9255 capped downside last week, albeit following a brief spell to lows at 0.9182 (levels not seen since June 2015). Recovery from here saw weekly resistance from 0.9447 come under fire, with buy stops north of the level providing impetus Monday as the pair retested the latter as support. The general sense on this timeframe is that continued buying will draw the spotlight towards the 2018 yearly opening level at 0.9744, joined closely by two weekly trend line resistances (0.9542/1.0226).
Recent buying, nevertheless, is under pressure on the daily timeframe, with resistance at 0.9542 entering the fight at the tail end of the week and holding Monday. A violation of this level could lead to some headway being made towards 0.9644, another layer of resistance.
Knowing we’re coming from daily resistance at 0.9542, traders may be nervous breakout buying north of 0.95. The flip side to this, of course, is the space available to run higher on the weekly timeframe. Therefore, by way of added confirmation, buyers may look for a retest at 0.95 to form before pulling the trigger, held by way of a H4 bullish candlestick signal. This helps confirm buyer intent.
0.96 is also a point of interest on the H4 timeframe as resistance, owing to price structure joining closely with a 61.8% Fibonacci retracement at 0.9598, closely shadowed by March and February’s opening level at 0.9627 and 0.9636, respectively. Do bear in mind, though, higher-timeframe resistance lacks within this region – the nearest is set at 0.9644 on the daily timeframe.
Disclaimer: The information contained in this material is intended for general advice only.