Monday’s analysis stated the following regarding a potential resistance zone on the H4 timeframe:
To the upside, a reasonably nice-looking area of resistance exists between 108.62/108.47 (green), comprised of January’s opening level at 108.62, resistance at 108.58 and February’s opening level at 108.47.
As evident from the charts, early Europe on Monday witnessed price action test 108.62/108.47, pulling back through 108. In recent hours, though, the unit recovered, reclaiming 108+ status and retesting the underside of the said resistance area. Mild H4 support at 107.43 appears to be withstanding downside attempts. Traders will also note the relative strength index (RSI) is seen recovering from oversold territory, currently trading at 38.62.
On a wider perspective, daily price, after leaving Quasimodo support at 106.96 unchallenged, is seen retesting the underside of the 200-day SMA (orange – 108.40), a noted upside resistance in Monday’s analysis.
The story on the weekly timeframe had price action record its largest weekly drop since July 2016 last week. Increased buying in this market could position price back at around the 2019 yearly opening level at 109.68. Aside from support possibly continuing to hold off the 107.65 January 8th low, the 106.48 September (2019) 30th low could be next on tap, with following support located around a Quasimodo formation off 105.35, in the event we drop lower.
Seeing the 200-day SMA currently in the fight on the daily timeframe around the 108.40 region, the H4 resistance area at 108.62/108.47 could hold for a second retest.
The possibility of a drive back through 108 is certainly a possibility, with another run at H4 support from 107.43 on the cards, followed by the 107 handle.
Therefore, traders may seek bearish themes off 108.62/108.47 today.
Disclaimer: The information contained in this material is intended for general advice only.