ICmarkets
Long

We're bullish above 0.7241...

FX:AUDUSD   Australian Dollar/U.S. Dollar
140 0 5
Coming at you directly from the pits of the weekly chart this morning, one can see that the bulls are beginning to wake up from weekly demand drawn from 0.7108-0.7186. In the event that this market continues to remain well-bid, we see little stopping the Aussie from connecting with weekly supply at 0.7438-0.7315. Sliding down into the daily chart , we can see that the recent buying seen from the aforementioned weekly demand area forced price to break above the daily supply zone carved from 0.7259-0.7226. However, it is still a little early to tell whether offers are drying up in this region. Let’s see what the H4 chart has to say on the matter…

The recent advance on the AUD has, as you can see, taken out H4 channel resistance (0.7402) and aggressively collided with offers around a H4 resistance barrier seen at 0.7241. Despite the clear back-to-back selling wicks visible here, our team has absolutely no interest whatsoever in shorting from here today. We will become interested in this level, however, if the market closes above this line!

Our suggestions: In light of the above points, today’s spotlight will firmly be focused on the H4 resistance 0.7241. A close above this level and subsequent retest will, in our opinion, set this market up for further buying. A close higher would not only demonstrate buying strength from the above said weekly demand, but it would also likely confirm offers have weakened within the current daily supply zone. Assuming the above setup plays out, we would, with a lower timeframe confirming signal, look to enter long, targeting the 0.73 handle (sits directly below weekly supply at 0.7438-0.7315 – the next upside target on that timeframe).

For ways of confirming a higher-timeframe level, in this case we’d simply look for an engulfed supply and subsequent retest, a trendline break and retest or even a collection of lower-timeframe buying tails around a lower-timeframe support line.
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