Based on recent price action, there appears to be a nice-looking buy setup forming. Friday’s rebound from the 61.8% Fibonacci resistance at 0.7135, coupled with Monday and Tuesday’s movement has chalked up what appears to be a H4 AB=CD pattern. What makes this pattern so attractive are the following converging structures:
• H4 support at 0.7025. • 38.2% Fibonacci support at 0.7020 (taken from the low 0.6863). • Weekly support at 0.7035 (fixed levels should be considered as zones rather than a definite price level in the market). • The large psychological support number seen just below at 0.7000.
However, our buy zone for this trade is seen between the 127.2%/161.8% Fibonacci extensions of the AB=CD pattern (yellow area at 0.6978/0.7013). Should price hit our zone of interest today, we would, if there is no high-impacting news on the docket, look to go long at market from here owing to the confluence currently being seen. Stops, at least for us, would be best placed beyond the 161.8% Fibonacci level around the 0.6070 mark. In regards to targets, we’re looking at the mid-level resistance 0.7050 as our first take-profit level, followed by the 0.7100 figure as a close second.