Recent activity on the H4 timeframe shows price failed to sustain gains beyond the 0.79 handle, and proceeded to fall sharply down to the mid-level support at 0.7850 (denotes the top edge of the aforesaid weekly ). A violation of this line could lead to a move being seen down to the 0.78 handle, which is seen encased within a H4 demand area at 0.7786-0.7804.
Suggestions: With room being seen on the for price to stretch beyond the H4 mid-level support at 0.7850, we would not feel comfortable buying from this line. From our perspective, an ideal scenario would be for price to reach beyond 0.7850 today and cross swords with the aforementioned H4 demand area. As we believe this is a strong buy zone, our desk has set a pending buy order at 0.7805, with a stop-loss order tucked beneath at 0.7784.
Data points to consider: Australian meeting minutes at 2.30am. US Core retail sales figures at 1.30pm GMT+1.