USD/CHF: Weekly technical outlook and review.

2014年7月27日

Weekly TF.

The buyers pushed price quite hard last week, and broke the mundane range that has formed above weekly demand at 0.85664-0.88124. If the buying pressure continues this week, we will very likely see price hit an important weekly decision-point level at 0.90927.

Daily TF.

A break above a daily supply area has been seen at 0.90372-0.90042, this is where things get interesting. It is very likely that the sellers are now consumed around the aforementioned daily supply area, thus clearing the path up to around the next daily supply area at 0.91556-0.90985. There is very little to left that we can see that will cause a problem to price if the buyers wanted to push it up that far. Notice the wicks seen in between these two areas? These wicks indicate likely supply consumption which makes the possibility of higher prices even stronger.
But, if pro money does not have the required liquidity, in this case sell orders to buy into, they will have to reverse price. We can see two obvious areas where they may reverse price to, a small daily demand area at 0.89973-0.89311 and the daily S/R flip level at 0.88608 below, it will be very interesting to see how price action unfolds this week.

4hr TF.

It was mentioned in Friday’s analysis that the wicks seen within the 4hr supply area at 0.90372-0.90148 likely consumed the sellers enough for this area to see a break north, which did happen. However, we also believed price would reverse back down to the round number 0.9, this clearly did not happen.

A break above the aforementioned 4hr supply area has likely opened up the possibility to much higher prices. Take a look to the left of the chart above this 4hr supply area. We can see lots of wicks indicating supply has been consumed right up to a 4hr S/R flip level at 0.90891, essentially all this does is confirm our daily analysis with a more magnified view. A rally straight up to this S/R flip level is unlikely, instead a reversal may be seen down to the 4hr decision-point level at 0.90215, or if the sellers have the strength, a further push south may be seen towards the round number 0.9 before the higher prices are seen.

Pending/P.A confirmation orders:

• Pending buy orders (Green line) are seen just above the round number 0.90000 at 0.90018. We would not normally set a pending buy order around a round number level such as this; however the first retest seen of this level gives us confidence to place an order such as this.
• Pending buy orders (Green line) are seen just above the decision-point level (0.89540-0.89614) at 0.89624. A pending buy order was placed here because this area remains an important decision-point area where the buyers ‘decided’ to trade above multiple highs to the left.
• New pending buy orders (Green line) are seen just above the decision-point level (0.90215) at 0.90233. The reasoning behind placing a pending buy order here is simply because this is the area on the 4hr timeframe where pro money buyers likely made the decision to break above the 4hr supply area at 0.90372-0.90148, hence the possibility there may still be unfilled buy orders lurking around this level.
• No P.A confirmation buy orders (Red line) are seen in the current market environment.

• No pending sell orders (Green line) are seen in the current market environment.
• No P.A confirmation sell orders (Red line) are seen in the current market environment.

• Areas to watch for buy orders: P.O: 0.89624 (SL: 0.89523 TP: Dependent on price approach) 0.90018 (SL: 0.89928 TP: Dependent on price approach) 0.90233 (SL: 0.90117 TP: Dependent on price approach). P.A.C: No P.A confirmation buy orders seen in the current market environment.

• Areas to watch for sell orders: P.O: No pending sell orders seen in the current market environment. P.A.C No P.A confirmation sell orders seen in the current market environment.