Our suggestions: Selling beyond 1.12 is an option today, but do take into account that this would only leave one 50 pips of room to play with down to the H4 mid-level support 1.1150, which is where we would look to take full profit given the confluence surrounding this barrier. To take advantage of this move, we’d recommend waiting for a H4 close beyond 1.12 that’s followed up with a retest and a lower-timeframe confirming signal. This could be either an engulf of demand followed by a retest of this area as supply, a break/retest or simply a well-defined collection of selling wicks off of 1.12. We typically search for lower-timeframe confirmation between the M15 and H1 timeframes, since most of our higher-timeframe areas begin with the H4. Stops are usually placed 1-3 pips beyond confirming structures.
Not only is 1.1150 a take-profit zone, it’s also a nice area to look for buying opportunities. The base offers the following structures:
• A H4 support taken from the high 1.1268.
• A H4 support etched from the low 1.1075.
• A H4 61.8% Fib support at 1.1155 drawn from the low 1.1074.
• A H4 level pegged at 1.1147 penciled in from the low 1.1109.
• A daily seen at 1.1142.
Seeing as how this zone is rather small, we will not be placing pending buy orders here. Instead, we’ve chosen to wait for a reasonably sized H4 bull candle to form, preferably a full-bodied candle. This will help prove buyer interest exists here which IS needed due to where price is trading from on the weekly chart right now.
Data points to consider: No high-impacting news events.