Monday 22nd September: Weekly technical outlook and review.

For the readers’ benefit:

Price action confirmation levels: Simplymeans traders will likely wait for price action to confirm a level by consuming an opposing supply or demand area, then entering a trade on a possible retracement, this may occur on the lower timeframes also.

Pending orders: means a level, or area is valid for a touch trade.

EUR/USD:

Weekly Timeframe: The Euro continued its relentless march south last week, and as a result saw prices closing just above a very obvious weekly ‘buy zone’ (1.26591-1.28010) at 1.28234. This zone remains an important one to us, since it has provided support to the market on three previous occasions, the first was on 25/03/13 (1.27497), the second seen on 13/05/13 (1.27953), and finally the third time was on 01/07/13 (1.28049), and as a result we are expecting some sort of bullish reaction to be seen here soon.

Daily Timeframe: With all things considered, not a lot of change was seen last week on the daily timeframe, since price is still firmly trading around a daily demand area at 1.27541-1.28676. Clearly, this is an area we should not underestimate, as it is located around the weekly ‘buy zone’. With that being said, this area could potentially see a break to the downside towards a very obvious daily support flip level at 1.26859, since this level still sits firmly within the weekly ‘buy zone’ (levels above).

4hr Timeframe: Since the previous analysis, the sellers have once again traded into 4hr demand at 1.28095-1.28353. We feel this area is weak due to the touch seen on 17/09/14 at 1.28331, as this move potentially consumed some of the buyers here, so a break south in our opinion is imminent.

With both the daily and weekly timeframes showing strong demand (Weekly: 1.26591-1.28010, Daily: 1.27541-1.28676) our bias for this pair is very much north, and as a result, we have placed a pending buy order just above a strong-looking fresh 4hr demand area (1.27541-1.27904) at 1.27970. A bounce at the very least should be seen here since this remains the overall origin of the huge rally that started on 09/07/13. Assuming our buy order gets filled early this week, the first take-profit target will likely be set just under 4hr supply (1.29276-1.28959) at 1.28899.

Pending orders/Price action confirmation levels:

• Areas to watch for buy orders: Pending orders: 1.27970 (Stop loss: 1.27477 Take profit level(s): Dependent on how price approaches). Price action confirmation levels:  No price action confirmation buy levels are seen in the current market environment.

• Areas to watch for sell orders: Pending orders: No pending sell orders are seen in the current market environment. Price action confirmation levels: No price action confirmation sell levels are seen in the current market environment.

GBP/USD:

Weekly Timeframe:  The British pound moved an incredible 362 pips last week! This was very likely because of the recent events surrounding Scotland. A beautiful to-the-pip touch was seen at a weekly decision-point supply area at 1.66429-1.65340 which brought prices back down to a weekly resistance flip level seen at 1.62591. This week we will be watching for lower-timeframe bullish price action around this level, if this level gives way, it would likely encourage follow-through selling down to weekly demand seen at 1.58533-1.60157.

Daily Timeframe: The daily timeframe shows price is trading very close to an important daily support flip level at 1.62503, take a look at the past, it’s a thing of beauty (this is literally the same as the weekly resistance flip level seen on the weekly timeframe).

Assuming we see bullish price action around this daily level, the potential to the upside is huge as we would likely target the1.66429-1.66057 area. On the other hand, if this level gives way, further selling may very well be seen down to daily demand at 1.60507-1.61044.

4hr Timeframe: With the recent volatility surrounding this pair, the pound formed a new swing high at 1.65233; it was at this point, the sellers took over and aggressively sold price ignoring not only the 1.64 level but also 1.63 as well.

The market closed just above a nice-looking fresh 4hr supply area (1.62453-1.62776) at 1.62835. We feel this area will indeed see a bullish reaction, but in our opinion the round-number resistance level (1.63) is too close to justify entering long (@market) from a risk/reward perspective, instead we will patiently watch price action for a close above the 1.63 level , and try to enter on a retrace targeting the 1.64 level. Alternatively, a close below here would likely suggest to us that follow-through selling may be seen down to around yet another fresh 4hr demand area at 1.61609-1.62057, where once again we would likely be watching for buyers to confirm this area before entering long.

Pending orders/Price action confirmation levels:

• Areas to watch for buy orders: Pending orders: No pending buy orders are seen in the current market environment. Price action confirmation levels: No price action confirmation buy levels are seen in the current market environment.

• Areas to watch for sell orders: Pending orders: No pending sell orders are seen in the current market environment. Price action confirmation levels: No price action confirmation sell levels are seen in the current market environment.

AUD/USD:

Weekly Timeframe: Overall, the sellers continued to dominate last week with price closing the week on its lows at 0.89206. We very much expect this downward momentum to continue this week, at least until the weekly Quasimodo support level seen at 0.88189.

Daily Timeframe: The daily timeframe shows the market could in fact continue to drop further this week at least until the 0.88874 level. Assuming prices break below here, this would likely attract further selling down to at least the weekly Quasimodo support level at 0.88189 (see above), and possibly the daily Quasimodo support level at 0.87556 given enough time.

For us, on this timeframe, all eyes will be on the 0.88874 level this week, as this will likely be the deciding point as to where prices will trade to next.

4hr Timeframe: the 4hr demand area seen at 0.89226-0.89485 has well and truly been consumed in our opinion, as price was seen successfully closing below this area just before the markets closed for the week.

With both the weekly and daily timeframes suggesting there is more room to the downside (see above); the next key area on this timeframe to watch for bullish price action is likely the 0.89 figure. Here’s why, take a look to the left of current price action, notice all those tails from 0.88725 up to 0.89413, these likely indicate demand consumption tails suggesting that the path south is relatively clear from buying opposition.

Assuming a positive close is seen below the round number (0.89), and preferably the 0.88725 level, further selling will likely be seen down to a very obvious 4hr support flip level at 0.88223 (a price action confirmation level has been set at 0.88262), which is if you remember right around where the weekly Quasimodo support level sits at 0.88189. This level is definitely one to have on your watchlist, since a reversal could very well be seen from here!

Pending orders/Price action confirmation levels:

• Areas to watch for buy orders: Pending orders: No pending buy orders are seen in the current market environment. Price action confirmation levels: 0.88262 (Stop loss: Dependent on price action after the level has been confirmed, Take profit levels(s): Dependent on approaching price action after the level has been confirmed).

• Areas to watch for sell orders: Pending orders: No pending sell orders are seen in the current market environment. Price action confirmation levels: No price action confirmation sell levels are seen in the current market environment.

USD/JPY:

Weekly Timeframe: Last week closed relatively deep within weekly supply (110.652-108.123) at 108.995, we will now be primarily looking for selling opportunities. However, in the event a buy trade presents itself, extreme caution will be taken regarding trade management, and risk.

Daily Timeframe: During Thursday’s trading sessions, a daily close above a major daily support flip level at 108.421 was seen. The next level of interest on this timeframe is seen deep within the weekly supply area (110.652-108.123) at 110.390 (daily Quasimodo resistance level), where we highly expect active sellers to come into the market

With that being said though, we should all be prepared for price to retest the 108.421 level before higher prices are seen, as it should now offer plenty of support since it was previous resistance, but as already mentioned above, extreme caution should be taken if planning to go long here, since active sellers could come into the market at any time!

4hr Timeframe: With not having enough historical data on the 4hr timeframe to see what the price action is like within the weekly supply area at 110.652-108.123, we’re forced to rely on only the 4hr and daily timeframes.

That being said though, selling interest was seen coming into the market on Thursday and Friday around the 109 level, could this be enough to force prices down to the daily support flip level at 108.421? Only time will tell. Nonetheless, if a successful break and retest is seen off of the 109 level, this would likely seal the deal that higher prices are yet to come up to at least the 110 level, which is if you remember very close to the daily Quasimodo resistance level at 110.390 where we will definitely be looking to get short!

Pending orders/Price action confirmation levels:

• Areas to watch for buy orders: Pending orders: No pending buy orders are seen in the current market environment. Price action confirmation levels: No price action confirmation buy levels are seen in the current market environment.

• Areas to watch for sell orders: Pending orders: No pending sell orders are seen in the current market environment. Price action confirmation levels: No price action confirmation sell levels are seen in the current market environment.

EUR/GBP:

Weekly Timeframe:  The EUR/GBP pair is now trading around serious weekly demand at 0.76931-0.78623 thanks to a 200 pip decline in value seen last week; this was likely fueled by the recent events surrounding Scotland. Overall, our bias for this pair is very much long, with the expectation of prices eventually trading up to at least the weekly supply area at 0.81571-0.80635.

Daily Timeframe: The recent decline in value brought prices down into daily demand at 0.77894-0.78271, which so happens to be the second layer of stacked demand (First has already been consumed [0.78117-0.78533]).

Buying interest was clearly seen out of this area forming a beautiful-looking pin-bar candle. Can we expect higher prices to be seen this week?  Well, considering we are now trading around weekly demand (0.76931-0.78623), it is in our opinion very possible.

4hr Timeframe: The 4hr timeframe shows a beautiful-looking 4hr Quasimodo support level at 0.78269 provided support to price last week (located within daily demand at 0.77894-0.78271).

The daily pin-bar candle seen piercing beautifully into daily demand at 0.77894-0.78271 does not look so good on the 4hr timeframe, sure, there’s bullish action being seen, but when the buyers traded right into 4hr supply (0.78963-0.78777) alarm bells should start to ring, as active sellers could come into the market here!

For us to even consider buying this market, a break above the pink level at 0.79133 would have to happen, this way we can be pretty confident most of the selling opposition is consumed, making any long entry taken after that less stressful.

So, for the time being on this pair, we are once again forced to be patient, and wait for the right time to enter!

Pending orders/Price action confirmation levels:

• Areas to watch for buy orders: Pending orders: No pending buy orders are seen in the current market environment. Price action confirmation levels: No price action confirmation buy levels are seen in the current market environment.

• Areas to watch for sell orders: Pending orders: 0.79882 (Stop loss: 0.80103 Take profit: Dependent on how price approaches).  Price action confirmation levels: No price action confirmation sell levels seen in the current market environment.

USD/CAD:

Weekly Timeframe: It seems after price consumed the weekly supply area at 1.10522-1.09996, the pair sold off sharply towards a weekly decision-point level at 1.08774, where buying interest is currently being seen, as expected.

Daily Timeframe: The daily timeframe has been showing very bullish price action over the last few weeks. It appears most of the sellers have now been consumed around the high 1.10768, which has potentially cleared the path north up to at least the 1.11910 level (Quasimodo resistance).

The daily demand area seen at 1.08390-1.08771 is a very interesting area to us, as we believe somewhere around here was where the overall decision was made to push prices above the high 1.10768, indicating there may be unfilled buy orders left here. Assuming price touches this area sometime this week; we will be definitely looking for buying opportunities on the 4hr timeframe.

4hr Timeframe: The round number 1.09 has well and truly been confirmed as a nice level to buy off of, be that as it may, if we were to set a pending buy order just above this level, we run the risk of being stopped out. The reasoning for this is simple; the daily demand area seen at 1.08390-1.08771 (just below the 1.09 level) may well be the next place price visits if sellers come into the market. We would rather wait for price to reach this higher-timeframe demand area, and then watch for some confirmation that price is indeed likely to rally.

On the other hand, if pro money buyers have already accumulated enough liquidity for a move higher, the 1.1 level (price action confirmation level set just below at 1.09964) may very well be seeing some action early on this week.

Pending orders/Price action confirmation levels:

• Areas to watch for buy orders: Pending orders: No pending buy orders are seen in the current market environment. Price action confirmation levels: No price action confirmation buy levels are seen in the current market environment.

• Areas to watch for sell orders: Pending orders: No pending sell orders are seen in the current market environment. Price action confirmation levels: 1.09964 (Stop loss: Dependent on price action after the level has been confirmed, Take profit levels(s): Dependent on approaching price action after the level has been confirmed).

USD/CHF:

Weekly Timeframe: At the time of writing, the weekly timeframe shows price is trading deep within weekly supply at 0.94546-0.93081. Should this pair see a sell off, we can likely expect active buyers to come into the market around the weekly resistance flip level at 0.90927.

Daily Timeframe: Even with the recent push seen deeper into daily supply at 0.94546-0.93702, this only tells us that both this supply area and the weekly supply area at 0.94546-0.93081 are likely beginning to weaken. With that being said, no decision (in our opinion) has yet to be made regarding future direction. Assuming a breakout above the daily supply area is seen, we can safely assume higher prices will likely follow (weekly supply [levels above] would also be consumed as well). On the other hand,  if selling interest comes into the market here, and consumes the daily decision-point level below at 0.93020, this then suggests to us follow-through selling may be seen down to around the daily demand area at 0.91251-0.91738, and thus confirms selling strength from the aforementioned weekly supply area.

4hr Timeframe: With both the weekly and daily timeframe showing price currently trading around supply areas (0.94546-0.93081/0.94546-0.93702), we have to favor shorts for the time being. Last week the market closed just above the round-number level 0.94 at 0.94029, this could very likely encourage further buying that would see price once again trading around 4hr supply  at 0.94546-0.94291, where it is likely active sellers will come into the market. We have set a price action confirmation sell level just below at 0.94241, simply because this area may have been weakened from the previous touch seen on 17/09/14 at 0.94320.

A close above this area would mean both the weekly and daily supply areas have been consumed as well, potentially clearing the path for much higher prices.

Pending orders/Price action confirmation levels:

• Areas to watch for buy orders: Pending orders: No pending buy orders are seen in the current market environment. Price action confirmation levels: No price action confirmation buy levels are seen in the current market environment.

• Areas to watch for sell orders: Pending orders: No pending sell orders are seen in the current market environment. Price action confirmation levels: 0.94241 (Stop loss: Dependent on price action after the level has been confirmed, Take profit levels(s): Dependent on approaching price action after the level has been confirmed).

XAU/USD (GOLD):

Weekly Timeframe: Price closed below the weekly decision-point level at 1244.08 on the 08/09/14, with price last week retesting it as an area of resistance. Could this be all the sellers need to push prices down to weekly demand at 1156.70-1194.45?

Daily Timeframe: The daily timeframe shows that before the sellers can reach weekly demand at 1156.70-1194.45, they have to contend with potential buying opposition from around a daily support flip level seen at 1211.67. A break below here would likely attract further selling down to a daily Quasimodo support level at 1187.13 located just within the aforementioned weekly demand area. However we cannot discount the possibility that buying interest may also come into the market here, in which case, price will likely trade up to daily supply at 1241.95-1235.34.

4hr Timeframe: As we already know, price is very near to hitting the daily support flip level at 1211.67, however looking on the 4hr timeframe, we were able to tidy up this level, and line it perfectly with the wicks/tails to the left (1211.12).

We have set a price action confirmation buy level just above here at 1212.43, since setting a pending buy order runs the risk of potentially being stopped out by a deep spike. Assuming a close below this level is seen, the next key area of support comes in at 1194.38, a 4hr Quasimodo level. This level is conveniently located just within weekly demand at 1156.70-1194.45, making it an area of great interest to us!

However, along with the daily timeframe, we cannot totally discount the possibility of a rebound off of the 4hr support flip level (1211.12). Assuming buyers do come into the market, we can likely expect active sellers to be waiting around a 4hr supply area seen at 1228.46-1223.28, if price consumes this area; tighten your seat belts because higher prices will likely follow!

Pending orders/Price action confirmation levels:

• Areas to watch for buy orders: Pending orders: No pending buy orders are seen in the current market environment. Price action confirmation levels: 1212.43 (Stop loss: Dependent on price action after the level has been confirmed, Take profit levels(s): Dependent on approaching price action after the level has been confirmed).

• Areas to watch for sell orders: Pending orders: No pending sell orders are seen in the current market environment.  Price action confirmation levels: No price action confirmation sell levels are seen in the current market environment.