The daily timeframe shows buyers are definitely active around demand at 0.79282-0.79649. A positive daily close below this demand area could be devastating for the buyers as there is very little stopping price from dropping all the way down to major support below at 0.77533 (not shown on the chart).
EURGBP Daily Chart (click to enlarge)
Buyers have rallied price to supply (D/S flip area) at 0.80053-0.80176 as reported may happen in yesterday’s analysis. A bearish reaction has been seen around this supply, and quite rightly so, with the huge figure 0.80000 lurking just below the supply (levels above).
The buyers have now confirmed demand at 0.79405-0.79552 by consuming the majority of sellers around the supply area mentioned above, this has allowed us to place a pending buy order where our confirmation buy order was originally set at 0.79580.
- No P.A confirmation buy orders (Red line) are seen in the current market environment.
- A pending buy order (Green line) has been set at 0.79580 just above demand at 0.79405-0.79552. The rationale behind this is because buyers have likely consumed the majority of the sellers lurking around supply (D/S flip area) at 0.80053-0.80176, likely clearing the path for higher prices. A small retracement will possibly be seen to collect more buyers for a rally higher, thus triggering our pending buy order.
- No pending sell orders (Green line) are seen in the current market environment.
- P.A confirmation sell orders (Red line) under the S/R flip level 0.81403 at 0.81393 is an area where a reaction is likely, however there were too many wicks north seen marked with arrows, indicating sellers are drying up, thus, the need to wait for more confirmation.
- P.A confirmation sell orders (Red line) are seen just under supply (0.80869-0.80771) at 0.80752. Confirmation orders were used here because price is trading around a weekly demand area (0.79596-0.80299), which means price could easily consume this supply level as the higher timeframes usually overrule the lower timeframes.
- P.A confirmation sell orders (Red line) are seen just below supply (0.80647-0.80583) at 0.80293. Confirmation orders were used here because price could easily consume this supply level as we are currently deep within a weekly demand area (0.79596-0.80299), which means price could easily consume this supply level as the higher timeframes usually overrule the lower timeframes.
EURGBP 4hr Chart (click to enlarge)
- Areas to watch for buy orders: P.O: 0.79580 (SL: 0.79368 TP:  0.80000  0.80583 [May change if any new developments in the market are seen]) P.A.C: No P.A confirmation buy orders are seen in the current market environment.
- Areas to watch for sell orders: P.O: No pending sell orders are seen in the current market environment. P.A.C: 0.81393 (SL: Will be likely set at 0.81564 TP: Will be likely set at the round number 0.81000) 0.80752 (SL: likely to be set at 0.80900 TP: Dependent on where price ‘confirms’ the level) 0.80293 (SL: likely to be set at 0.80648 TP: Dependent on where price ‘confirms’ the level).
- Most likely scenario: Price will likely see a decline in value as pro money will possibly want to collect liquidity in and around demand at 0.79405-0.79552, before any higher prices are seen.
For the readers’ benefit:
Price action confirmation: simply means traders will likely wait for price action to confirm a level by consuming the opposing supply or demand area, then entering a trade on a possible retracement, this may occur on the lower timeframes also.
Pending orders: means pending orders are likely seen.
Source: IC Markets Trading Desk