Crude Oil is the main focus going into 3rd May. There is some interesting structure at play in this market, as outlined on the chart.
One of the most interesting charts out there at the minute – Dax is below a big area on the hourly chart. A good play would be to look for longs at the 12480 area in preparation for a probe of 12650 liquidity.
If the lower level isn’t tagged before we take the highs, it will be worth looking for longs off of 12650 as we explore to new areas of value. I will only be looking for longs there if we accept above – meaning we spend time above there and don’t immediately fall back into the range.
Anatomy of a breakout.
Firstly, note that 1 & 2 and 4 & 5 are pretty much the same structure, with 4 & 5 being within
the larger pattern of 1 & 2.
At (1), we put in multiple highs (also an inside day high). This becomes an area which is likely
to have stops build up beyond it. This becomes somewhat of magnetic price point.
At (2), we can see a support level which was previously resistance on the left. This is then broken
at (3). However, price cannot hold below (3) and is making new highs again.
(4) is the same multiple high structure as (1).
(5) sees a repeat of (2) – move below support but cannot hold below it, we are immediately bid.
(6) seals the fate of any bear. At this point we know – with great probability – that we are going
to find out what’s above (1).
Today’s chart of the day, USDCAD, has broken out of a large area of resistance. The 1.2980 area is visible on both the hourly and daily charts. We had a solid punch through the area during Thursday’s trade, meaning I am now looking for a return to the area.
Upon return to the area I will look to buy, and am currently bid 1.2976. My target is currently 1.3045, my stop is 1.2927. This gives around 1.5R. The order is subject to change, should new structure form ahead, thereby changing the trade dynamics.
Looking to be a buyer of GBPUSD at 1.3918 for a quick pop to the orange line 1.3956.
I believe this to be a high probability area for a bounce as it is multiple prior highs, with an aggressive move through it, trapping sellers.
1.3852 in GBPUSD is a fantastic level to pivot short off of. However, it doesn’t quite fit my entry criteria. Depending on how you trade, you may get an entry there.
I will wait for price action in the general area in order to gain more confirmation and confidence in the trade level.
On USDCAD we have seen two days in a row where we’ve failed to close back above the key daily resistance (silver dashed line).
Should we get a break to the downside, through the green line, I will try to position short.
If I see my entry criteria and manage to position short, I believe we will make a move down to the white line, the next area of structure on the chart.
Today I am looking for a bullish bounce in EURUSD off of the 1.2364 area.
This is a huge level of former resistance on the hourly chart and is also visible on the daily chart.
Target at the moment is new highs while my stop loss will need to be at 1.2322.