ICmarkets
Long

Our thoughts on the Aussie dollar this morning guys...

FX:AUDUSD   Australian Dollar/U.S. Dollar
118 0 4
Since weekly action whipsawed through the weekly resistance level at 0.7604 last week, this has sent the commodity-linked currency into something of a free-fall. However, with prices now seen trading within touching distance of a weekly support area coming in at 0.7438-0.7315, we may begin to see this pair shortly bottom out. From the daily chart , the Aussie is showing some promise within the extremes of a daily support area at 0.7517-0.7451, which sits only a few pips above the aforementioned weekly support area .

Despite the DJIA             rallying to fresh highs yesterday, a highly correlated market with the Aussie dollar, the pair sold off from the 0.75 handle to lows of 0.7461 on the day. What is also interesting on the H4 chart is that price came within a few pips of connecting with a H4 mid-way support line at 0.7450. This – coupled with a mid-range H4 Quasimodo support at 0.7446, an ascending H4 channel support line taken from the low 0.7148 and merging with a daily support area , makes this an awesome place to look for a bounce!

Our suggestions: Despite price coming so very close to 0.7450, our team still recommends keeping a close eye on this number today since there’s still a chance that price could pull back. Nevertheless, we would advise only trading this barrier should one be able to pin down a lower timeframe entry. This could be in the form of an engulf of supply followed by a subsequent retest, a trendline break/retest or simply a collection of well-defined buying tails around the 0.7450 region. Stops are usually placed 5-10 pips beyond confirming structures and in this case preferably beyond the H4 channel support line.
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