Potential longs from 0.7377/0.74...

2017年5月31日

Coming in from the top this morning, we can see that sellers continue to stamp in their authority from weekly supply noted at 0.7524-0.7446. In the event that this continues, the next downside target can be seen at a weekly trendline support etched from the low 0.6827. Down on the daily picture, yesterday’s segment helped print a near-full-bodied bearish candle that wiped out Tuesday’s gains. We do not see much in the way of support on the daily timeframe until we reach the support zone marked at 0.7284-0.7326 (fuses nicely with the aforementioned weekly trendline support).

Over on the H4 timeframe, however, price action looks poised to extend lower to test 0.7377/0.74. This area is comprised of the following structures:

• 0.74 handle.
• H4 61.8% Fib support at 0.74 taken from the low 0.7328.
• A H4 Quasimodo support at 0.7394.
• A H4 support area at 0.7398-0.7377.
• A H4 AB=CD (black arrows) 127.2% ext. at 0.7389 drawn from the high 0.7515.

Our suggestions: Although the noted H4 buy zone marked in green will likely bounce price, it unfortunately lacks higher-timeframe support. The closest support on the bigger picture comes in at the said daily support area. Therefore, to enter long from 0.7377/0.74, we would require at least a H4 candle to form within this zone (preferably a full-bodied candle) to prove buyer interest exists before committing to a long. The first take-profit target, should a trade come to fruition here, is likely to be the H4 mid-level resistance at 0.7450.

Data points to consider: Australian Private capital expenditure and Retail sales at 2.30am. US ADP non-farm employment change at 1.15pm, US weekly unemployment claims at 1.30pm and US ISM Manufacturing PMI figures at 3pm GMT+1.