By: Doug Rosen
Those of you that follow my analysis on a daily basis have probably noticed that analysis is based on multiple timeframes as well as multiple pivot points and even at times multiple currencies. Always look for multiple layers of support and resistance. Don't take trades bases on just one element. Different traders look at different things. Try to imagine what different types of traders are looking at and put it all together. This is referred to as confluence.
Today, while looking at the EUR/GBP weekly timeframe it looks very bearish in nature and has even recently broke out of a price channel it had been trapped in for a long time. But this is a weekly timeframe and a lot can happen within a weekly candle.
A long lower wick would have been a big down day and then a long up day. When price hits an area of support on a weekly such as a 144 ema you can expect a bunch that can be a daily uptrend. This week so far we touched the 144 overlapped with a lower Bollinger band pointing up, price jumped.
Now price is approaching the weekly 5 ema and when they make contact most likely there will be a push down.
On the daily timeframe it is obvious there has been much buying pressure around .8515 and price has bounced off this area two days in a row and is now coming up to the 13 ema that has been highly respected three times previously and I would expect it to be respected again, at least some type of a reaction.
On the 4 hour timeframe I see price at the upper edge of a price trap with the 55 ema overlapped with the monthly M2 just above at .8573 What I like about areas like this is that something will always happen. It is narrowed to just two things, price will fall or price will break out. There is strong resistance here so a bounce down is expected, but if price breaks upside it will take off.
On the hourly timeframe price is just below the 233 ema at .8576 and just a bit above there is the weekly M3 pivot and yesterdays high is at .8583 with the daily R1 at .8587. Taking all this into consideration it appears that the .8580 - .8590 area has much resistance so a bounce down from that zone is likely and a break above then a retest could be an excellent buy opportunity.