EURUSD Daily Technical Outlook and Review Wednesday 23rd July

4hr TF.

The higher-timeframe picture resembles the following:

  • The sellers are still pushing the buyers to their limits within the weekly demand area at 1.34760-1.36314 with buyers at the moment showing very little interest.
  • The daily timeframe shows a spike/tail deep into daily demand at 1.34760-1.35265 with very little interest being seen by the buyers at the moment (look at that selling wick!). A break below the aforementioned daily demand area could well see prices testing daily demand below at 1.33984-1.34397.

The 1.35164 level was hit as reported may happen in the last analysis, however there was not many active buyers sitting there, as price is now (at the time of writing) trading below this area.

As explained in the last analysis, our current higher-timeframe location does not look too good for the buyers at the moment (see above). However, for a break of the higher-timeframe demand areas (for levels see above), pro money will likely need liquidity, in this case buy orders for their sell orders.

If the pro money sellers push price down to 4hr demand at 1.34760-1.34943 this will no doubt entice breakout sellers to follow thus giving pro money some sell orders to buy into. Here is where a likely reaction will be seen; a nice rally up to the 4hr decision point (supply) area at 1.35714-1.35609 will be seen. If this does indeed happen, what will likely 90% of the other traders think? They will likely think price is reacting at the deepest point of the two higher-timeframe demand areas (levels above) and then join in on the buying. As price is rising, pro money will likely be selling in small chunks to these buyers, so by the time they reach the 4hr decision point area (supply) at 1.35714-1.35609 they will most probably be heavy short.

This is only one possible scenario, so please do take it as such. Pro money controls the market, so it is always best to try and think like them.

Pending/P.A confirmation orders:

  • New pending buy orders (Green line) are seen just above demand (1.34760-1.34943) at 1.34966. The reason we have set a pending buy order here is because we believe pro money will use this level to push prices higher to at least the 4hr decision-point area at 1.35714-1.35609 before a possible sell off commences.
  • No P.A confirmation buy orders (Red line) are seen in the current market environment.
  • Pending sell orders (Green line) are seen just below the decision-point supply area (1.36632-1.36485) at 1.36416. The reasoning behind placing a pending sell order here is due to the simple fact we have seen buyers consumed at multiple lows and demand areas below, thus making it a low-risk high-probability trade.
  • Pending sell orders (Green line) area seen just below the 4hr decision-point area (1.35714-1.35609) at 1.35596. The reason a pending sell order was allocated here is because this is where pro money (on this timeframe) possibly made the decision to sell price into the 4hr demand below at 1.35018-1.35375.
  • P.A confirmation sell orders (Red line) are seen just below supply (1.37224-1.37028) at 1.36894. A P.A.C order was selected here due to the reaction seen at the aforementioned supply area proving its validity. However, pro money may well decide to push price higher into this supply area if/when price returns to it, thus making it a risky trade for a stop above the high 1.36995 which could be very easily be stopped out if a pending sell order was set, hence the need to wait for confirmation.


Quick Recap:

With both the weekly and daily timeframes showing buying weakness within demand (Weekly: 1.34760-1.36314 Daily: 1.34760-1.35265), it is very possible we may see lower prices on the 4hr timeframe. However before this happens, pro money will likely require the liquidity for a decline in price such as this. Watch the 4hr demand area at 1.34760-1.34943 for a possible push up (we have recently added a pending buy order here at 1.34966) to the 4hr decision-point area (supply) at 1.35714-1.35609 hopefully filling our pending sell order set at 1.35596 in the process. This will likely give pro money the liquidity they require for a nice sell off which will consequently break below the aforementioned higher-timeframe demand areas.

  • Areas to watch for buy orders: P.O: 1.34966 (SL: 1.34758 TP: Dependent on price approach)P.A.C: No P.A confirmation buy orders are seen in the current market environment.
  • Areas to watch for sell orders: P.O: 1.36416 (SL: 1.36584 TP: Dependent on price action approach) 1.35596 (SL: 1.35768 TP: Dependent on price approach). P.A.C: 1.36894 (SL: Dependent on price action after the level has been confirmed TP: Dependent on approaching price action after the level has been confirmed).


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