Going forward, we can see that the H4 candles are now kissing the underside of the H4 mid-way number 1.0550. This level, in our humble opinion, is likely going to give way since there is not only a daily support currently in motion, but also a yearly opening level as well (see above). The next upside objective beyond this mid-way point is December’s opening level at 1.0590, shadowed closely by 1.06, and then the H4 supply at 1.0632-1.0620 that happens to merge with a H4 resistance extended from the high 1.0714.
Our suggestions: Despite H4 price trading at a mid-level resistance, we would not be comfortable selling this market. A H4 close above this number, followed by a retest and a lower-timeframe confirming signal would, however, be something of interest. Ultimately, we’d be looking for either the following to take shape on the lower timeframes to confirm this line: an engulf of supply followed by a retest as demand, a break/retest or simply a well-defined collection of buying tails printed around 1.0550. 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 3-5 pips beyond confirming structures.
Data points to consider: EUR CPI data at 10am. US Jobless claims at 1.30pm GMT .