After failing to reach the H4 broken Quasimodo line at 0.9683 on Tuesday, the pair turned south and eventually thundered its way through the 0.96 handle seen on the H4 timeframe.
While the break of 0.96 has likely attracted a truckload of breakout sellers, one should exercise caution! Daily action shows price is currently reacting from a daily AB=CD (see black arrows) 161.8% Fib ext. point at 0.9575 seen within the lower limits of a daily demand base coming in at 0.9565-0.9611. The flip side to this, of course, is that weekly price shows little support in the market until we reach a weekly support area located around the 0.9443-0.9515 neighborhood.
Market direction:
While further selling could be a possibility, one has to be prepared for a potential relief rally back up to daily resistance at 0.9711. Personally, we feel there are just too many opposing structures to trade this market with confidence right now. Therefore, opting to stand on the sidelines may be the better path to take.
Data points to consider: US industrial production m/m and capacity utilization rate at 2.15pm; FOMC member Mester speaks at 9.30pm GMT.
Areas worthy of attention:
Supports: 0.9443-0.9515; 0.9565-0.9611; 0.9575.
Resistances: 0.96 handle; 0.9683; 0.9711.
While the break of 0.96 has likely attracted a truckload of breakout sellers, one should exercise caution! Daily action shows price is currently reacting from a daily AB=CD (see black arrows) 161.8% Fib ext. point at 0.9575 seen within the lower limits of a daily demand base coming in at 0.9565-0.9611. The flip side to this, of course, is that weekly price shows little support in the market until we reach a weekly support area located around the 0.9443-0.9515 neighborhood.
Market direction:
While further selling could be a possibility, one has to be prepared for a potential relief rally back up to daily resistance at 0.9711. Personally, we feel there are just too many opposing structures to trade this market with confidence right now. Therefore, opting to stand on the sidelines may be the better path to take.
Data points to consider: US industrial production m/m and capacity utilization rate at 2.15pm; FOMC member Mester speaks at 9.30pm GMT.
Areas worthy of attention:
Supports: 0.9443-0.9515; 0.9565-0.9611; 0.9575.
Resistances: 0.96 handle; 0.9683; 0.9711.
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