Daily Timeframe: Last week saw the buyers fake price above the 0.7844 daily swap level, which, as you can see, happens to be the upper limit of a three-week long range (0.7691/0.7844). This push higher has likely consumed both the buyers attempting to trade the breakout, and also sellers trying to fade, thus likely opening the gates for price to challenge a small, yet clearly resilient daily supply area seen above at 0.8050-0.7994.
4hr Timeframe: Like the GBP/USD , the AUD/USD pair has been, and still is trading nicely within a 4hr (0.7643/0.7827). Given the recent strength seen on the last week, and the fact that price is still trading just above weekly demand (see above) at the moment, our main focus for today, and possibly the rest of the week will be primarily looking for buy trades.
As you can probably see, Friday’s trading action saw the Aussie rebound from the lower limit of the aforementioned 4hr . We were watching this line, but were dubious about entering long here owing to the fact that 4hr demand at 0.7738-0.7764 was lingering just below. This 4hr demand area (tentative buy orders are seen just above at 0.7768) is, at the time of writing, the only place we’d consider entering long on this pair for the following reasons:
1. It remains untouched, relatively fresh.
2. This area of demand was also very likely where the decision was made to break above the aforementioned daily range (see above), and as a result, there are very likely unfilled buy orders left here just waiting to be tapped.
3. Additional support is being seen from a mid-range 4hr Quasimodo marked in green at 0.7756.
Waiting for confirmation around this 4hr area is recommended. Targets for this trade (if an entry single is seen that is) are as follows: the round number 0.7800, the daily swap level 0.7844, and finally the 4hr supply area coming in at 0.7905-0.7881. However, let’s not forget that price is trading around weekly demand and could effectively go much higher!
Current buy/sell orders:
• Buy orders: 0.7768 (Predicative stop-loss orders seen at: 0.7733).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).