With yesterday’s aggressive slide, technical traders are likely watching for September’s opening level at 1.1913/1.19 handle to hold firm as resistance. Should this come to fruition, all eyes will likely then be on August’s opening line at 1.1830, which happens to not only be positioned a few pips above daily demand at 1.1739-1.1823, it also converges with a H4 formation (see black arrows). However, for price to sell off and reach 1.1830, weekly support at 1.1871 would need to be weakened.
Suggestions: We feel the best thing to do right now is be patient. It would, in our technical view, be unwise to attempt a sell at 1.1913/1.19 when weekly price is so near to support. Should price push lower and challenge 1.1830, however, then great, we have a high-probability buy zone to trade. If not, we could see the unit extend back up to the mid-level point 1.1950 or quite possibly the large number 1.20.
Data points to consider: US figures and US Unemployment claims at 1.30pm GMT+1.
Levels to watch/live orders:
• Buys: 1.1830 region (waiting for a H4 candle to form – preferably in the shape of a full, or near full-bodied candle – is advised, stop loss: ideally beyond the candle’s tail).
• Sells: Flat (stop loss: N/A).