All eyes back on the 0.80 number, traders!

2017年8月27日

Weekly gain/loss: + 4 pips
Weekly closing price: 0.7928

Weekly bulls, as can be seen from the weekly timeframe, continued to defend the support area at 0.7849-0.7752 last week. Further buying from this vicinity could eventually see the bulls shake hands with resistance carved from 0.8075 (a resistance line that stretches as far back as 2008).

Turning over a page to the daily timeframe, the candles are seen trading 40 or so pips ahead of the Quasimodo resistance level at 0.7988. Traders may have also noticed the other Quasimodo resistance level lurking just above at 0.8030. This line was already tested at the end of July, and as you can see, held beautifully.

Looking across to the H4 candles, the 0.79 handle was reclaimed as support on Friday after the release of Janet Yellen’s speech, lifting the commodity currency up to the 0.7950 neighborhood. In previous reports you may recall our team highlighting the 0.80 level as a particularly interesting sell zone. Apart from 0.80 being a watched round number, there are several nearby structures that deserve mention:

• The daily Quasimodo resistance level at 0.7988.
• A H4 Quasimodo resistance level at 0.8007.
• A H4 127.2% Fib ext. point at 0.80 taken from the low 0.7807.
• August’s opening level at 0.7998.
• A H4 Harmonic Gartley reversal point at the 78.6% Fib resistance line drawn from 0.8011.

Suggestions: While the above structures (H4 green sell zone) boast attractive confluence, one must take into account the possibility that a fakeout may be seen up to the daily Quasimodo resistance level at 0.8030 sited just above the green zone. Traditionally, when trading the Gartley Harmonic pattern the stop-loss order should go beyond the X point (0.8065). If you were to follow this, a fakeout up to the daily Quasimodo resistance is not a concern. It is more for the aggressive traders who will likely look to position stops just beyond the green zone. Should you be one of those traders, you may want to consider waiting for the H4 candles to prove seller intent from the sell zone (in the form of either a full, or near-full-bodied bearish candle), before pulling the trigger. This will help avoid a fakeout should it occur.

Data points to consider: No high-impacting news events scheduled today.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 0.8011/0.7988 (stop loss: either wait for a H4 bearish candle to form in the shape of a full, or near-full-bodied candle, and place stops above the candle’s wick. Another option is to simply enter at 0.80 and place stops above the H4 Harmonic X point at 0.8067).