Suggestions: Considering that both weekly and daily price show room to decline further, our team has absolutely no interest in buying from current price or the H4 demand base. The H4 Quasimodo support seen plotted below the current demand at 0.7839, however, is of interest (not seen on the screen). Not only does 0.7839 align nicely with the top edge of daily demand at 0.7838 and nearby the top edge of the weekly at 0.7849, we also have the benefit of all the juicy stop-loss orders planted below the current H4 demand. Remember, when a buyer’s stop is triggered it becomes a sell order, which is ideal liquidity to buy!
Given the above, we have set a pending buy order at 0.7839, with a stop placed below the apex of the Quasimodo formation (0.7807) at 0.7805. This equates to a 34-pip stop. As the first take-profit target does not come into view until 0.79, this allows the trader to nearly double his/her initial risk!
Data points to consider: US Core durable goods orders at 1.30pm; US New pending home sales at 3pm; FOMC member Brainard speaks at 7pm GMT+1.