Strong resistance between 0.7062/0.7041 ahead of AU retail sales
AUD/USD:
The Australian dollar gathered momentum for a second consecutive day Wednesday, consequently dethroning the key figure 0.70 to the upside and printing fresh 8-week highs. Lower US Treasury yields coupled with improved risk appetite allowed the H4 candles to close within striking distance of May’s opening level at 0.7041.
With buy stops likely triggered above Monday’s high 0.7034, shorter-term traders are likely in buy mode. While further buying could certainly take form, strong resistance lies ahead. May’s opening level at 0.7041 is unlikely sufficient to halt buying, though united with weekly resistance at 0.7042: the 2019 yearly opening level, along with nearby resistance on the daily timeframe at 0.7062 and the H4 RSI producing negative divergence (red line), we then have ourselves a reasonably strong block of resistance, represented by the green zone on the H4 timeframe.
Areas of consideration:
Focus is fixed on the 0.7062/0.7041 green sell zone on the H4 timeframe.
A combination of H4, daily and weekly resistances, is likely enough to withhold buying pressure. Traders have the option of either selling 0.7041 and positioning stops above 0.7062, or, adopting a more conservative route, waiting and seeing if a H4 candlestick signal develops within the said zone and trading on the back of its structure. The first downside target from 0.7062/0.7041 can be seen at 0.70.
The Australian dollar gathered momentum for a second consecutive day Wednesday, consequently dethroning the key figure 0.70 to the upside and printing fresh 8-week highs. Lower US Treasury yields coupled with improved risk appetite allowed the H4 candles to close within striking distance of May’s opening level at 0.7041.
With buy stops likely triggered above Monday’s high 0.7034, shorter-term traders are likely in buy mode. While further buying could certainly take form, strong resistance lies ahead. May’s opening level at 0.7041 is unlikely sufficient to halt buying, though united with weekly resistance at 0.7042: the 2019 yearly opening level, along with nearby resistance on the daily timeframe at 0.7062 and the H4 RSI producing negative divergence (red line), we then have ourselves a reasonably strong block of resistance, represented by the green zone on the H4 timeframe.
Areas of consideration:
Focus is fixed on the 0.7062/0.7041 green sell zone on the H4 timeframe.
A combination of H4, daily and weekly resistances, is likely enough to withhold buying pressure. Traders have the option of either selling 0.7041 and positioning stops above 0.7062, or, adopting a more conservative route, waiting and seeing if a H4 candlestick signal develops within the said zone and trading on the back of its structure. The first downside target from 0.7062/0.7041 can be seen at 0.70.
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