Ivan Delgado
Independent Analyst
The USD index extended its consolidative moves through Monday. The activity come son the back of violated intraday supply level at 82.50 although the climb higher saw the contract disallowed from its next supply at 83.00/83.20 - as per the drop-base-drop from last April - ahead of next offers at 83.50/84.00. Intraday demand noted between 82.20/30 ahead of 81.50/82.00.
Pay attention to the index location. When it nears demand, unfilled buy orders will likely provide broad initial support to the USD, thus one may potentially increase the chances of a USD long play succeeding on such convergence. The same applies if playing USD short positions, with the odds further stacked in one's favour when the index faces supply.
Chart LIVE available at FXstreet.com
White lines drawn represent supply/demand levels
Below we identify the most relevant supply and demand levels as per obvious imbalances between buying and selling interest in the EUR/USD. These are areas where large institutions were active buyers and/or sellers in recent trading. Supply and demand identification is a critical tool to identify where the unfilled buy/sell orders may lie.
EUR/USD goes nowhere fast, 1.29/2930 or retest of 1.3120/40 next?
No new developments in the EUR/USD, with the supply level at 1.3120/40 -noted in several occasions in our daily report - still a sellers stronghold, while on the downside, any approach at 1.30 conventional/psychological support continues to push prices away. Should the level be broken, fresh demand lies below in the 1.2930/1.29 area, as per the April 5th drop-base-rally, a 'level on top of level', which strengthens the case to see an initial decent bounce off the level in case a test takes place in the next sessions ahead.
Supply and demand levels identified in the chart
Good luck!
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