Tuesday 17th February: Daily technical outlook and review.

EUR/USD:

Weekly Timeframe: The weekly timeframe shows price is currently trading between a weekly supply area coming in at 1.1678-1.1458, and a weekly Quasimodo support level at 1.1109. Nevertheless, much of the recent trading action has been seen taking place a little below the aforementioned weekly supply area.

Daily Timeframe: Further selling was seen yesterday from the daily swap level visible at 1.1411. This move has consequently forced price once again to attack a small daily demand area seen at 1.1260-1.1318.

4hr Timeframe: The recent sell off on the Euro has seen price hit a small 4hr demand area at 1.1304-1.1318, which if you look on the daily timeframe you’ll notice is located within the upper limits of the aforementioned daily demand area. We agree that buying from this 4hr area looks tempting; since in addition to being located within higher-timeframe demand, there is also a clear profit gap seen from here up to at least 1.1379. However, let’s not forget that in buying from here, we would likely be trading with higher-timeframe opposition coming in from around the aforementioned weekly supply area (see above). Therefore, for us to even consider buying the Euro here, lower timeframe confirmation would need to be seen before we put any money at risk.

Conversely, selling is obviously supported by the fact price trading below the aforementioned weekly supply area at the moment, however, selling into daily/4hr demand (see above) is just something our team cannot condone, no matter what’s supporting it!

In the event that the current 4hr demand area fails to hold the market, traders can likely expect prices to decline in value down to at least the 4hr swap level seen at 1.1278 (located around the lower limits of the aforementioned daily demand area).

Current buy/sell orders:

• Buy orders: Waiting for lower timeframe confirmation around 4hr demand at 1.1304-1.1318 (Predicative stop-loss orders seen at: 1.1297).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

GBP/USD:

Weekly Timeframe: Last week saw sterling strongly close above a weekly swap level seen at 1.5270. Assuming that the buyers can hold the market above this level, we then feel there’s a good chance that price will likely test the weekly supply area seen at 1.5784-1.5541.

Daily Timeframe: Yesterday saw selling interest come into the market around a daily swap level coming in at 1.5433. This level remains a key obstacle to a move towards a daily decision-point supply area coming in above at 1.5619-1.5548, which if one looks back to the weekly chart; you’ll notice that this area is nicely located just within the aforementioned weekly supply area.

4hr Timeframe: As we can all see, the GBP did indeed see a reaction from the combined (marked in green) round-number 1.5400 and 1.5433 daily swap area. As a result, this has pushed price down towards a small 4hr swap level seen at 1.5351, where at the time of writing, buying interest is currently being seen. Our team currently has no interest in buying the GBP here; we would much prefer to look for longs lower down around the combined (yellow zone) round number 1.5300 and 1.5270 weekly swap area. With that being said, if 1.5351 gives way today and price retests this barrier as resistance, we’d definitely consider taking advantage of this shorting opportunity as long as we have corresponding lower timeframe confirmation. Assuming we found a short here, we’d look to take full profits around 1.5300 (as per the green arrows), and switch to looking for buy trades as just mentioned above.

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders are seen at: N/A).
• Sell orders: Flat (Predicative stop-loss orders are seen at: N/A).

AUD/USD:

Weekly Timeframe: Last week ended with the Aussie forming yet another weekly indecision candle above the weekly demand area coming in at 0.7449-0.7678. Assuming that the buyers begin showing strength here, a rally higher could well be seen up towards a weekly swap level visible at 0.8064.

Daily Timeframe: The daily picture shows that for the past two weeks, the AUD/USD pair has been seen ranging between two daily swap levels (0.7844 and 0.7691). A break above this daily range would likely force the market out of its current indecisive phase, and potentially inspire further buying up to a small daily supply area seen at 0.8050-0.7994 (located just below the aforementioned weekly swap level). Conversely, a push below would likely attract further selling towards a daily demand area at 0.7449-0.7598 (located deep within the aforementioned weekly demand area).

4hr Timeframe: Technically, this pair has not seen much price change; therefore most of our previous analysis still remains valid…

Price continues to linger within and around a small 4hr supply area seen at 0.7794-0.7768, which at the time of writing has shown very little convincing selling interest. To be sure that we’re all on the same page here, let’s just quickly recap. The weekly chart is showing indecision just above a weekly demand area, while the daily timeframe is currently seen ranging between two daily swap levels (see above for levels). This – along with the recent price behavior seen on the 4hr timeframe, shorting from the current 4hr supply area is something we would not consider to be high probability.

That being the case, assuming price breaks above this 4hr supply area and once again attacks the daily swap level seen at 0.7844; it would be at this point that our team would begin looking for confirmation to sell around the 0.7840 mark on the lower timeframes. Selling with a pending order here may be a viable strategy to some traders considering this level’s history, but we remain wary, owing to the fact that price is presently hovering above a weekly demand area (see above) at the moment.

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: 0.7840 (Predicative stop-loss orders seen at: dependent on where one confirms this level).

USD/JPY:

Weekly Timeframe: Last week saw the market print a nice-looking bearish pin bar candle near the upper limits of a compressed symmetrical triangle. All of this has formed in between a major weekly swap level at 115.50 and a weekly Quasimodo resistance level visible at 122.18.

Daily Timeframe: The daily timeframe shows that price has recently broken below a small daily demand area coming in at 118.32-119.09, which may have cleared the path south towards a daily demand area seen at 116.86-117.54.

4hr Timeframe: The market opened 24 pips lower than Friday’s close (118.68) at 118.44, and consequently saw price break below a 4hr demand area seen at 118.32-118.54 (located deep within the daily demand area mentioned above at 118.32-119.09).

In the event that price closes below this 4hr demand area and retests it as supply, we would definitely consider shorting from here (with confirmation from the lower timeframes) down to around the 117.86 4hr swap level, here’s why:

1. The profit gap comes in at around 68 pips down to 117.86, giving us ample space in which to profit.
2. The weekly chart is currently showing price trading around the upper limits of a symmetrical triangle, thus giving us extra confidence that resistive pressure may well be seen in the market.

Given the points made above, our team will only begin considering buy trades if price closes above 118.80, this could potentially provide us with an intraday long towards 119.00 from the lower timeframes.

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

USD/CAD:

Weekly Timeframe: The situation on the weekly timeframe reveals that the long-term weekly Quasimodo resistance level seen at 1.2765 continues to hold the market lower. In the event that further selling is seen from here, we feel there is a good chance that price will hit the weekly swap level coming in at 1.2260 very soon.

Daily Timeframe: The daily timeframe on the other hand shows that the daily decision-point demand area seen at 1.2378-1.2468 continues to provide support to the market. This area of demand remains a key obstacle to a move towards the aforementioned weekly swap level. It will be interesting to see what the 4hr timeframe has to say about this…

4hr Timeframe: Not much change has been seen on the 4hr timeframe since we last visited this pair, so most of our previous analysis will remain the same…

The break (red arrow) of the 4hr demand area at 1.2429-1.2469 (located just within the aforementioned daily decision-point demand area) has likely cleared the path south down towards a 4hr swap level seen at 1.2379, which coincidentally sits around the lower limits of the aforementioned daily decision-point demand area. 1.2379 in our opinion remains a key obstacle to a move towards a potential buy zone colored in green comprising of the 1.2300 level, and the weekly swap level mentioned above at 1.2260.

Given the points made above, where does this leave us with regards to trading this pair? Well, considering that the market is being held lower at the moment by a weekly Quasimodo resistance level (see above), and the 4hr demand area at 1.2429-1.2469 has been breached, we feel that selling with lower timeframe confirmation around the 4hr supply area seen just above at 1.2572-1.2522 may be worth considering. Targets for any shorts taken here would be set at 1.2379 and 1.2300. However, do bear in mind that by selling here, you would effectively be selling into the aforementioned daily decision-point demand area, so be sure to watch price action closely.

With regards to buying this pair, the majority of our team agreed that the best place to look for longs would be around the aforementioned green buy zone. Be that as it may, we do have the 1.2379 barrier on our radar and will keep an eye on the lower timeframe price action around this level once or indeed if price reaches here.

Current buy/sell orders:

• Buy orders: 1.2379 [Tentative] (Predicative stop-loss orders seen at: dependent on where one confirms this level).
• Sell orders: Watching for lower timeframe confirmation around 4hr supply at 1.2572-1.2522 (Predicative stop-loss orders seen at: 1.2578).

USD/CHF:

Weekly Timeframe: Last week saw price retest the weekly swap level seen at 0.9204. Assuming that the buyers can hold out above this level, further buying will likely ensue up to the weekly swap level seen at 0.9382.

Daily Timeframe: Similar to the weekly timeframe, last week saw the buyers begin to show some strength around the weekly swap level seen at 0.9204 in the form of four small consecutive bull days (Tue – Fri). In the event that the buyers can continue with this tempo and break above the 0.9343 high formed on 02/02/15, price will then likely be free to test the weekly swap level seen just above at 0.9382.

4hr Timeframe: Recent developments on the 4hr timeframe show price continues to tease the 4hr swap level coming in at 0.9316. In the event that the buyers convincingly close price above this level, it is very likely further upside will be seen towards the weekly swap level mentioned above at 0.9382. To take advantage of this potential move north, we see two options. Firstly, one could enter at market upon price closing above this level – effectively buying the breakout. Secondly, one could wait for price to retest 0.9316 as support, and buy with lower timeframe confirmation. Due to our conservative trading nature, we favor the latter. By waiting for price to retest this level however, you run the risk of missing the train altogether and price hitting the target (0.9382). This is the price you must pay to have a little more confirmation.

Regarding selling at this 4hr swap level – this is something the team has recently discussed and came to a general consensus that shorting here is not viable due to the weak reactions it has seen of late.

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

DOW 30:

Weekly Timeframe: Following the strong rebound seen two weeks ago from the ignored weekly Quasimodo level coming in at 17135, further extension was seen last week forcing price to close near its highs at 18010. In the event that further buying is seen this week, we feel there’s a very good chance that price will attack the overall high seen at 18098 very soon.

Daily Timeframe: Yesterday saw selling interest enter the market from just below a small daily supply area seen at 18098-18045. If further downside is seen from here, price will likely retest the daily swap level coming in just below at 17896 sometime soon.

4hr Timeframe: the 4hr timeframe shows that price has sold off from the 4hr supply area seen at 18047-18014 (located just below the aforementioned daily supply area) down towards a 4hr swap area coming in at 17952-17911. Provided that this 4hr swap area can support the DOW, we feel there is a very good chance that price will likely attack and possibly break above the 4hr supply area. In the event this happens, the market will then likely trade to new highs. The reason for this is simple. Take a look above this 4hr supply area to the left, can you see how supply may well already likely be consumed? There are two 4hr supply areas that jump out to us; the first comes in at 18093-18062, and the second at 18061-18046. Both of these areas have already been hit, and with that, some of the selling pressure here likely taken out. Therefore, if strong buyers come into the market, we believe that these small areas of 4hr supply will not stand much of a chance. On the other hand, if the 4hr swap area is broken lower, price will immediately be free to hit the daily swap level seen just below it at 17896, which in itself could provide a nice base in which to look for longs.

With the above taken into account, we intend to watch how price behaves on the lower timeframes around the 4hr swap area today, if a buy signal is seen, our first take-profit target will likely be set at an even 18000, seen just below the 4hr supply area. In the same way, if price breaks below the 4hr swap area; we’d then begin watching for lower timeframe buying confirmation around the 17905 mark seen just above the aforementioned daily swap level.

Current buy/sell orders:

• Buy orders: watching for lower timeframe confirmation around the 4hr swap area at 17952-17911 (Predicative stop-loss orders seen at: 17885) 17905 (Predicative stop-loss orders seen at: dependent on where one confirms this level).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

XAU/USD (Gold):

Weekly Timeframe: Last week saw Gold print an indecision candle just above a weekly swap level located at 1222.2. If buying strength is seen from this area, watch for the weekly swap level just above at 1251.5 to potentially repel the market. A break below 1222.2 on the other hand would likely open the doors to further downside towards a weekly demand area seen at 1166.8-1195.0.

Daily Timeframe: Yesterday’s trading action saw minor selling interest from within a daily decision-point supply area seen at 1245.8-1233.1. This area remains a key obstacle to a move towards the weekly swap level mentioned above at 1251.5.

4hr Timeframe: Following the rally seen from the 4hr swing low at 1217.3, the buyers and sellers are now currently battling for position just below a small 4hr supply area at 1238.6-1235.2. Selling from here could potentially cause unnecessary stress, as it would likely put you up against both higher-timeframe buying opposition from the weekly swap level seen at 1222.2, and also near-term 4hr support seen just below at 1227.7.

From where we’re standing, traders have two choices here, well three if you include being flat. The first option is that one could sell from the 4hr supply area and target both the near-term 4hr support and higher-timeframe weekly swap level. If you consider this viable, we would strongly advise waiting for some sort of confirmation signal before risking any money here. The second option is to buy from the 4hr support level. Now, we agree that you would in effect be trading in line with the weekly timeframe here, but entering long into both 4hr and daily supply (see above) could cause serious drawdown before price moves in your favor, if at all.

With the above in mind, our team has weighed up the current options and has humbly decided to sit this one out until further development is seen.

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

The post Tuesday 17th February: Daily technical outlook and review. appeared first on .

Source:: Tuesday 17th February: Daily technical outlook and review.