Looking to short from 0.76...

FX:AUDUSD   Australian Dollar / U.S. Dollar
155 0 3
Weekly gain/loss: + 66 pips
Weekly closing price: 0.7562
Weekly opening price: 0.7561

Weekly view: A succession of bids flowed into the market last week, extending the prior week’s bounce from deep within weekly demand coming in at 0.7438-0.7315. Thanks to this recent surge in buying, the commodity-linked currency is now seen trading within touching distance of a weekly resistance line drawn from 0.7604. We believe a reaction from this vicinity is likely this week, so do make a note of this level in your watch lists!

Daily view: In conjunction with weekly price, the daily candles also show that the next objective to reach is the aforementioned weekly resistance line. However, just like we saw going into the ‘Brexit’ sell-off, price could potentially fake through this weekly level before driving lower. The daily supply at 0.7719-0.7665, although positioned over sixty pips above the weekly line, may be tagged if price does indeed whipsaw again.

H4 view: Looking at Friday’s action on the H4 shows that price sold-off sharply to lows of 0.7470 on the back of stronger than expected US jobs data. For all that though, the Aussie quickly reversed from here and marched higher, forcing price to close the week above H4 supply at 0.7544-0.7534 (now acting demand).

With little change seen at this morning’s open, here is what our team has logged going forward:

• Weekly resistance at 0.7604 is the next level likely on the hit list.
• The weekly resistance level at 0.7604 (the next upside target on the bigger picture) also coincides beautifully with the 0.76 handle and a deep H4 88.6% Fib level at 0.7608.
• The H4 candles appears to also be in the process of forming a nice-looking H4 AB=CD bearish pattern , which tops out around the 0.76 region (see H4 chart).

Our suggestions: Given the confluence seen around the 0.76 handle, our team has placed a pending sell order at 0.7599, with a stop above the high 0.7647 at 0.7649. Regarding our first take-profit target, this is a little difficult to judge since the approach has yet to be completed. Usually though we look to aim for the next logical area of demand on the H4 timeframe.
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