Weekly Timeframe: Last week was clearly a fantastic week for anyone short the Aussie Dollar, as the pair declined a cool 320 pips from the underside of a recently broken descending channel (limits can be found at 0.9556 – 21/10/13 … 0.8846 – 05/08/13). This move consequently saw price consume a weekly demand area at 0.8064-0.8460, and at the same time attack another weekly demand area coming in at 0.7699-0.7974 forcing the market to close at 0.7897.
Daily Timeframe: As a consequence of the recent sell off, the daily timeframe reveals that prices broke below a daily demand area seen at 0.7958-0.8070. This has likely opened the gates for prices to challenge a daily Quasimodo support area coming in at 0.7699-0.7834 (located deep within the weekly demand area mentioned above at 0.7699-0.7974). It will be interesting to see what the 4hr timeframe has to say about this…
4hr Timeframe: As we can all see the rebound from the ignored 4hr Quasimodo level at 0.8126 recently extended lower, breaking below both the 4hr Quasimodo support level at 0.8034, and the round-number 0.8000. This subsequently encouraged follow-through selling during Friday’s trading sessions, forcing the Aussie a further south into 0.7900.
Let’s quickly recap, just to make sure that we’re all on the same page here. The weekly chart shows price is firmly trading within weekly demand at the moment, while the daily timeframe indicates that there is still room to the downside, deeper within the weekly demand area (see above). So, where does this leave the 4hr timeframe in the overall scheme of things? It’s quite simple really. Price can either break and retest 0.7900 and attempt to reach 0.7800 (located just within the daily Quasimodo support area mentioned above at 0.7699-0.7834), or rally higher from 0.7900 back up to 0.8000.
On the whole, buying from 0.7900 would require some very sexy lower-timeframe confirmation for us to even consider this as an option. By the same token, a break below and retest of 0.7900 would again require confirmation from the lower-timeframes – first take-profit target for this trade would be around the 0.7835 mark, seen just above the aforementioned daily Quasimodo support area, and potentially, with enough time, the 0.7800 handle.
The reason for confirmation here is simply because (as most of you are already aware), psychological numbers such as these are prone to fakeouts which can lead to unnecessary stop outs.
Current buy/sell levels:
• Buy orders: currently watching for lower-timeframe confirmation around the 0.7900 area (Predicative stop-loss orders seen at: dependent on where one confirms this level).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).
Daily Timeframe: As a consequence of the recent sell off, the daily timeframe reveals that prices broke below a daily demand area seen at 0.7958-0.8070. This has likely opened the gates for prices to challenge a daily Quasimodo support area coming in at 0.7699-0.7834 (located deep within the weekly demand area mentioned above at 0.7699-0.7974). It will be interesting to see what the 4hr timeframe has to say about this…
4hr Timeframe: As we can all see the rebound from the ignored 4hr Quasimodo level at 0.8126 recently extended lower, breaking below both the 4hr Quasimodo support level at 0.8034, and the round-number 0.8000. This subsequently encouraged follow-through selling during Friday’s trading sessions, forcing the Aussie a further south into 0.7900.
Let’s quickly recap, just to make sure that we’re all on the same page here. The weekly chart shows price is firmly trading within weekly demand at the moment, while the daily timeframe indicates that there is still room to the downside, deeper within the weekly demand area (see above). So, where does this leave the 4hr timeframe in the overall scheme of things? It’s quite simple really. Price can either break and retest 0.7900 and attempt to reach 0.7800 (located just within the daily Quasimodo support area mentioned above at 0.7699-0.7834), or rally higher from 0.7900 back up to 0.8000.
On the whole, buying from 0.7900 would require some very sexy lower-timeframe confirmation for us to even consider this as an option. By the same token, a break below and retest of 0.7900 would again require confirmation from the lower-timeframes – first take-profit target for this trade would be around the 0.7835 mark, seen just above the aforementioned daily Quasimodo support area, and potentially, with enough time, the 0.7800 handle.
The reason for confirmation here is simply because (as most of you are already aware), psychological numbers such as these are prone to fakeouts which can lead to unnecessary stop outs.
Current buy/sell levels:
• Buy orders: currently watching for lower-timeframe confirmation around the 0.7900 area (Predicative stop-loss orders seen at: dependent on where one confirms this level).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).
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