Daily view: The daily picture on the other hand, reveals that price closed the week in between a daily supply area seen at 0.8074-0.8006 (located just below the weekly swap level 0.8064), and a daily coming in at 0.7785-0.7850 (positioned just below the weekly swap level 0.7845).
4hr view: In the overall scheme of things, Friday’s trading sessions were not really anything to get excited about. A mediocre rally was seen from the psychological limit 0.7900, with price seen slightly rebounding from the mid-level number 0.7950 into the close. Nonetheless, the current price action on the 4hr chart is in the process of forming a very-nice looking 4hr pattern with almost perfect symmetry.
Thanks to the reaction at 0.7950, we now have a potential of A-B forming a C point. Assuming that price drops from here this week, which we think it will (we’ll explain why in a moment), it will likely hit the 4hr reversal zone shaded in yellow coming in at 0.7832/0.7801. In addition to this, this reversal zone is also sitting within a clear 4hr demand area coming in at 0.7785-0.7835, with additional round-number support seen at 0.7800.
Why do we think prices will decline in value this week? Well, assuming price manages to consume the round number 0.7900, the pathway south is likely ‘demand free’ so to speak. Our rationale behind this idea comes from the very obvious demand consumption tails seen marked with a small red line at: 0.7862/0.7874/0.7883. These tails were likely sent south fill unfilled buy orders around the 0.7900 area in order to continue rallying higher, thus with little buyers left here, price should theoretically be free to drop.
With regards to the higher timeframes, a drop in value down to the 4hr reversal area will effectively place the Aussie deep within daily demand at 0.7785-0.7850, which, as we’re sure you’ll agree, certainly adds more confluence to any longs taken from here.
Levels to watch/ live orders:
• Buys: 0.7832/0.7801 (Predicative stop-loss orders seen at: 0.7780).
• Sells: Flat (Predicative stop-loss orders seen at: N/A).
Ps. Is it possible you can post a chart showing the how the Swap level is derived?