Daily timeframe: The shows that on Friday, the buyers pushed price further above the daily decision-point supply area seen at 0.87608-0.86798 (marked with a blue arrow). Since the majority of sellers are possibly consumed around here now, this likely clears the path north to a daily coming in at 0.88961-0.88302. Let’s take a look on the 4hr timeframe to see what we can find.
4hr Timeframe: The 4hr timeframe shows that price pushed above a 4hr supply area last week at 0.87608-0.87419 (located deep within the aforementioned daily decision-point supply area), potentially clearing the path north towards 0.88. Before this happened though, notice that price faked below the low 0.86646 beautifully; this looked like a clear hunt for liquidity to us.
We firmly believe that higher prices are going to be seen on the Aussie next week as we have higher-timeframe direction backing us for the time being (see above). With that being said, before a rally can ensue, we have to be prepared for a small decline in value as the big guys will likely require further liquidity to buy into this market. Therefore, we are going to be watching the following near-term 4hr levels for potential buying opportunities this week: 0.87192, just above a small 4hr resistance flip level at 0.87154, and also 0.87021, just above the psychological number 0.87. First take-profit levels for us would be situated around 0.88 as shown on the chart.
In our opinion, confirmation from the lower timeframes would be required for anyone who wishes to trade at these levels, since there’s always the possibility that pro money may want to collect any unfilled buy orders that may be remaining around the fakeout level (0.86646). Touch trading this level around 0.86688 is something we would consider with a stop set at 0.86439, once again targeting 0.88.
• Buy orders: 0.87192 (Predicative stop-loss orders seen at: 0.87100) 0.87021 (Predicative stop-loss orders seen at: 0.86659) 0.86688 (Predicative stop-loss orders seen at: 0.86439).
• Sell orders: N/A (Predicative stop-loss orders seen at: N/A).