Big relief rally on late night Eurozone announcement. The risks to the downside are “is it enough” as previous relief rallies faded once the details became clearer.
I created support and resistance levels using a 4 hour chart and placed them on the longer term chart. I have given explanations for why they exist. Support once broken becomes resistance and vice-versa.
Current price = 1350
Some context: May 04-24 – on the 4 hour chart price spiked down to 1346/1347 however the real defense area was 1352/1354 (R1) and the upside was 1380/1382 (R4) – it was very choppy in this range in April. Price did gap through it on the way down after a poor NFP number but I don’t think it will go back up as easily.
Support below here
Current Range goes back to 05/07-05/11 – the 4 hour chart shows long wicks showed aggressive buyers at 1337/40 in the past as a support level (once this support broke the next stop was 1280.75). (This chart also shows R1).
S2: 1326/1328 – 1326.25 was a pullback Low on March 6 and capped the upside a few times until a breakout last week. This area is important to watch as support. Failure here will require another defence of 1300/1307 from last week.
S3/S4 The epic battle at 1307/1302
R1: even though price is here now I expect this area to provide resistance. June high had resistance was 1352 – price bounced there before FOMC and sold from 1357.
R2 1364.75 was a resistance in February and is key now.
R3: May range top 1376/1382 (see image 2)
R4: 1382 was support at the top with (extended R) 1396 a strong Resistance.