Wednesday 25th February: Yellen, Draghi and Carney all speak today – traders should expect volatility around those times.

EUR/USD:

Weekly Timeframe: The weekly timeframe shows that ever since price rebounded from the weekly Quasimodo support level at 1.1109 (26/01/15), the market has been seen hesitating below a weekly supply area coming in at 1.1678-1.1458. A break above here could very well clear the path north up to a major weekly swap level seen at 1.1758.

Daily Timeframe: Since the 12/02/15, the EUR/USD pair has been seen consolidating between a small daily demand area visible at 1.1260-1.1318, and a daily swap level sitting at 1.1411. This daily swap level, in our opinion, remains a key obstacle to a move higher into the aforementioned weekly supply.

4hr Timeframe: Recent developments from the Euro pair show price is currently ranging between 1.1300 and 1.1350. We’re not really holding out much hope for this consolidation, since high volatility will likely be seen in the markets today (see the title).

If price manages to get down to the 1.1278 level sometime today, we’d then begin watching for lower timeframe buying confirmation to enter into a quick bounce/scalp trade. This level is particularly attractive due to the amount of successful bounces it has seen in the past. The reason why we’re not looking for a reversal here is simply because price is currently trading around the underside of a weekly supply (see above) at the moment.

With regards to sell trades today, there are two areas that have caught our attention. The first, the higher of the two comes in at 1.1497-1.1462. Our team still has a pending sell order set just below here at 1.1457 since this zone remains relatively fresh, and is located just within the limits of the aforementioned weekly supply area. Nonetheless, before price can reach this area, we may see a reaction at what we like to call a 4hr ‘sell zone’ seen at 1.1448-1.1411 (tentative sell orders are seen just below at 1.1406), which, as you can see, is neatly positioned around the aforementioned daily swap level.

Current buy/sell orders:

• Buy orders: 1.1278 [Tentative] (Predicative stop-loss orders seen at: dependent on where one confirms this level).
• Sell orders: 1.1406 [Tentative] (Predicative stop-loss orders seen at: 1.1450) 1.1457 (Predicative stop-loss orders seen at: 1.1503).

GBP/USD:

Weekly Timeframe: The weekly timeframe shows that the buyers and sellers are still seen battling for position within the lower limits of a weekly swap area coming in at 1.5426-1.5561.

Daily Timeframe: Yesterday’s trading action saw the buyers find support around the recently broken daily swap level at 1.5426. Providing that further buying comes into the market here, we could potentially see the GBP rally towards a daily supply area visible at 1.5619-1.5548 (located just above the weekly swap area at 1.5426-1.5561).

4hr Timeframe: For those of you who read our last report on the GBP, you may recall us mentioning that we had our eye on the aforementioned daily swap level as an area in which to look for confirmed longs. As we can all see, a reaction was indeed seen, unfortunately though, we were unable to find an entry long on the lower timeframes. Supposing we did manage to enter long here, our team would now be watching for Monday’s high at 1.5479 to be broken, as this will likely open the gates for price to challenge the 1.5500 handle, which is where we’d have taken full profits.

In the event that price does reach 1.5500 today, we feel there’s a very good chance a reaction will be seen here for the simple reason that it’s located deep within the weekly swap area mentioned above. However, entering with a pending sell order here would, for us, be too risky. A more conservative approach may be to wait for price to show strength on the lower timeframes first before risking one’s money here.

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders are seen at: N/A).
• Sell orders: 1.5500 [Tentative] (Predicative stop-loss orders are seen at: dependent on where one confirms this level).

AUD/USD:

Weekly Timeframe: The weekly timeframe shows price remains trading just above a weekly demand area coming in at 0.7449-0.7678. Should a rally higher be seen from here, weekly resistance is not expected to come into the market until around the 0.8064 region.

Daily Timeframe: The daily picture shows that for the past three weeks, price has been ranging between two daily swap levels (0.7844 and 0.7691). Yet, over the past week or so, the buyers have recently been seen teasing 0.7844, which, in our opinion, looks poised for a breakout.

4hr Timeframe: The latest coming from the 4hr timeframe shows that price faked below a 4hr demand area seen at 0.7756-0.7785, which clearly offered enough liquidity for the market to rally north and take out the 0.7800 handle.

As we can all see, price is trading very near to the daily swap level (0.7844) at the moment. For anyone interested in selling around this line, we would highly recommend waiting for confirmation on the lower timeframes, since let’s not forget that price is trading just above a weekly demand area at 0.7449-0.7678. A convincing break above this level however would likely attract further buying up to a fresh 4hr supply area seen at 0.7905-0.7881. Buying the break is something our team has no interest in doing since the distance for profit is only around 30-35 pips.

This may be going against our rules a little here, but we plan to watch for confirmed shorts around this 4hr supply area. The reason being is that this area may provide pro money a nice place to fake price above the aforementioned daily swap level. To be clear here, we’re definitely not expecting a reversal, more a bounce back down to 0.7844, or even 0.7800, before price continues north bound (as per the green arrows).

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: will watch for confirmed shorts around 4hr supply at 0.7905-0.7881 (Predicative stop-loss orders seen at: 0.7909) 0.7844 (Predicative stop-loss orders seen at: dependent on where one confirms this level).

USD/JPY:

Weekly Timeframe: The weekly timeframe shows that price has recently closed just above the upper limits of a symmetrical triangle formation (121.83/117.43). Assuming that the buyers can hold out above this barrier, further upside could be seen up to around the weekly Quasimodo resistance level coming in at 122.18.

Daily Timeframe: The daily timeframe reveals that price is currently being supported by a daily decision-point demand area coming in at 118.32-119.09. This support barrier does not look very stable in our opinion due to the recent attempts to trade below here seen on the 16/02/15, 17/02/15, and on the 20/02/15. In the event that price does indeed close below here, we’ll then likely see renewed selling interest down to a daily demand area positioned at 116.86-117.54.

4hr Timeframe: The 4hr timeframe shows that price has recently broken through a key 4hr swap level coming in at 119.35. This has very likely opened the doors for further upside towards the 120.00 level.

At the time of writing, price is seen trading around a 4hr demand area at 118.73-118.95 (located just within the aforementioned daily decision-point demand area). Assuming that the buyers can hold out here, and consume the 119.00 level sitting just above it, we feel this may be a nice place in which to begin looking for confirmed longs up to 120.00.

However, In the event that this 4hr demand area gives way, further downside will likely be seen towards another 4hr demand area coming in at 118.32-118.54 (located deep within the aforementioned daily decision-point demand area). Buying from here is a little risky in our opinion, simply because of the amount of times this zone has been breached (dates can be seen above – daily timeframe).

Current buy/sell orders:

• Buy orders: Watching how price behaves around 4hr demand at 118.73-118.95 (Predicative stop-loss orders seen at: 118.69).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

USD/CAD:

Weekly Timeframe: The weekly timeframe shows that price is still is being held lower by a weekly Quasimodo resistance level at 1.2765. If further selling is seen from here, price will likely hit the weekly swap level coming in at 1.2260.

Daily Timeframe: The daily picture shows that support is currently being seen from a daily decision-point demand area at 1.2378-1.2468. The current state of this zone however suggests that further downside may well be in store, since it was breached twice already (03/02/15 – 17/02/15), and each time price hit the area, the market was unable to form a higher high.

4hr Timeframe: Following a fakeout above 4hr supply coming in at 1.2644-1.2611, prices plummeted, and consequently closed below a 4hr decision-point level seen at 1.2509. This has very likely cleared the path south for further selling down to at least a 4hr Quasimodo support level at 1.2419. To take advantage of this potential move, we have, as far as we can see, two options:

1. Entering at market, effectively selling the breakout.
2. Waiting for price to retest 1.2509 as resistance, and sell with corresponding lower timeframe confirmation.

Due to our conservative trading nature, we favor the latter. However, in doing so, we are also prepared to miss this trade, since sometimes, well in fact many times, a retest is not seen.

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: 1.2509 [Tentative] Predicative stop-loss orders seen at: dependent on where one confirms this level).

USD/CHF:

Weekly Timeframe: The weekly timeframe shows that the buyers have recently pushed price back up to the weekly swap level coming in at 0.9529. In the event a break above this hurdle is seen, this would likely open the doors for further buying towards a weekly swap level seen at 0.9746.

Daily Timeframe: Yesterday’s trading action printed a small indecision candle just below a daily swap area seen at 0.9529-0.9568.If selling interest comes into the market here, price will likely (once again) retest the weekly swap level at 0.9382.

A break above and retest of this daily swap area however would likely inspire the buyers to continue pushing the market north towards a daily Quasimodo resistance level seen at 0.9740 (located six pips below the weekly swap level at 0.9746).

4hr Timeframe: The buyers and sellers are currently seen trading between minor support and resistance coming in at 0.9466 and 0.9517. In the event that 0.9466 gives way today, further downside towards a minor 4hr swap level at 0.9450 will likely be seen. Even though price is currently trading around higher-timeframe resistance (see above) at the moment, selling here will only be permitted once/if price breaks below and retests 0.9450, since we then have a clear profit target down towards the weekly swap level at 0.9382.

With regards to buying this pair, we have no interest whatsoever entering long at higher-timeframe resistance. That being the case, buy trades (at this point in time) will only be considered if price closes above the daily swap area coming in at 0.9529-0.9568.

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: The weekly timeframe shows that further buying was seen last week which consequently saw price close (18130) above the 18098 high. If the buyers can maintain their position above this number, this will likely suggest a more bullish bias going forward.

Daily Timeframe: Following the recent break above and retest of daily supply at 18098-18045, the DOW saw further buying yesterday, forcing price to a fresh high of 18230.

4hr Timeframe: For those who read our previous analysis on the DOW, you may recall us mentioning that our team was watching lower timeframe price action around the recently broken weekly high at 18098. After a few hours of sitting on our hands, we found a beautiful long setup on the hourly timeframe at demand seen at 18100-18106, which was filled (18109) at 9.34am London time yesterday.

Our stop is currently set at breakeven, and the plan is to watch price closely on the 4hr timeframe to form a 4hr demand base today, which will give us confidence to move our stop into profit.

Current buy/sell orders:

• Buy orders: 18109 [Live] (Predicative stop-loss orders seen at: presently set at breakeven).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

XAU/USD (Gold):

Weekly Timeframe: The weekly timeframe shows that Gold has recently hit a weekly demand area coming in at 1166.8-1195.0. Assuming that there are active buyers here, price could very well rally back up to test 1222.2.

Daily Timeframe: Trading action on the daily timeframe shows that another spike/tail pierced through the small daily swap level yesterday at 1200.0. This would usually suggest to us that the path was now clear for further downside, but seeing as price has spiked lower into weekly demand (see above), we can only assume at this point it may be a fakeout for higher prices.

4hr Timeframe: As you can see, price still remains trading around the 4hr decision-point demand area at 1186.6-1194.3 (represents the upper limit of the aforementioned weekly demand area), which, in our opinion, is still a great area to look for confirmed longs.

Should price rally from here, we remain confident that Gold will reach at least 1217.3. The reason for why, as explained yesterday, is simply because the spike/wick seen marked with a green arrow at 1210.1 has likely consumed most of the major selling opposition seen around minor 4hr supply at 1212.5-1206.6, which remains to be the only obstacle we see stopping a move towards 1217.3.

With regards to shorts, our team (at the time of writing) has come to a general consensus that selling this market will only be considered once/if price breaks below the aforementioned weekly demand area.

Current buy/sell orders:

• Buy orders: watching for lower timeframe confirmation around the 4hr decision-point demand area at 1186.6-1194.3 (Predicative stop-loss orders seen at: 1185.2).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

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