ICmarkets

AUD/USD: Technical outlook and review.

FX:AUDUSD   Australian Dollar/U.S. Dollar
134 2 5
Weighed on heavily by a poor Australian employment print, the pair, after ever so slightly bouncing from the H4 Quasimodo support at 0.7451 (a level our desk highlighted as somewhere price would likely react from), fell sharply and ended the day shaking hands with the 0.74 handle.

Recent losses also saw the unit nudge below the daily support area at 0.7517-0.7451 (now an acting resistance area ), thereby placing the daily support at 0.7334 in the firing range. Meanwhile, up on the weekly chart, the current weekly candle is now seen firmly trading within the confines a support area logged in at 0.7438-0.7315.

Our suggestions: Although a bounce from 0.74 is certainly not out of the question seeing as it is housed within the walls of the current weekly support area , the decisive close beyond the daily support area seen yesterday is concerning. In light of this, here is how we intend to approach this market:

• Wait and see if the H4 candles close beyond the 0.74 boundary. Should this come to life, our desk will need a retest to the underside of this number alongside a reasonably sized H4 bearish close, before a short trade can be executed, targeting the daily support mentioned above at 0.7334. The reason we require the H4 bearish close here is simply due to where price is positioned on the weekly chart.

• 0.7334 is not only an ideal take-profit zone, it’s also a beautiful place to buy from! A daily support that’s lodged within a weekly support area is, at least in our book of technical setups, a high-probability reversal zone, which is surely to produce a healthy bounce at best.

Data points to consider: FOMC member Bullard then speaks at 10.30am, followed by two other members taking the stage (Dudley/George) at 2.30pm GMT             .

Levels to watch/live orders:

• Buys: 0.7334 (trading this number at market is a possibility here but is dependent on the time of day, stop loss: 0.7310 – beyond the weekly support area ).
• Sells: Watch for a close below 0.74 and then look to trade any retest seen thereafter (reasonably sized H4 bearish close required).
Cryptoelite PRO
3 months ago
Hi Thanks for the post - I have been anticipating this big move on the Aussie. I managed to catch it for the big move and also a few day trades (shorts) over the past few days. I am wondering what your thoughts are on the market symmetry and potential of hitting .71?

snapshot
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ICmarkets PRO Cryptoelite
3 months ago
@Cryptoelite, Nice work on the shorts! We did not notice that AB=CD pattern - great eye! It could definitely reach that low, in our opinion.
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