Looking for shorts out of 0.7518/0.75...
Following Wednesday’s close above H4 supply at 0.7430-0.7413, yesterday’s Asia segment saw the unit retest the top edge of this area as support and register bullish intent (seen clearer on the H1). Fueled by strong commodity prices, the Aussie aggressively rallied against its US counterpart, consequently surpassing the 0.75 handle and touching gloves with H4 resistance coming in at 0.7518.
The response seen from this H4 resistance level should not really come as much of a surprise to technicians who subscribe to multi-timeframe analysis. Not only does the H4 hurdle inhabit the upper extremes of a weekly supply area at 0.7524-0.7450, it also coincides well with daily supply at 0.7524-0.7494 that fuses with a daily trendline resistance taken from the low 0.7407.
Our suggestion: Based on the current structure of this market, the path of least resistance is south. As a result, what our team has their beady little eye on today is a pullback to 0.7518/0.75 for a possible sell trade (as per the black arrows). Ultimately, before we look to short we’d want to see evidence of seller interest in the form of a reasonably sized H4 bearish candle.
Data points to consider: Chinese trade balance (tentative release time). Fed Chair Janet Yellen speaks at 12am, US retail sales and PPI readings scheduled for release at 1.30pm, FOMC member Harker speaks at 2.30pm, US consumer sentiment data at 3pm GMT.
The response seen from this H4 resistance level should not really come as much of a surprise to technicians who subscribe to multi-timeframe analysis. Not only does the H4 hurdle inhabit the upper extremes of a weekly supply area at 0.7524-0.7450, it also coincides well with daily supply at 0.7524-0.7494 that fuses with a daily trendline resistance taken from the low 0.7407.
Our suggestion: Based on the current structure of this market, the path of least resistance is south. As a result, what our team has their beady little eye on today is a pullback to 0.7518/0.75 for a possible sell trade (as per the black arrows). Ultimately, before we look to short we’d want to see evidence of seller interest in the form of a reasonably sized H4 bearish candle.
Data points to consider: Chinese trade balance (tentative release time). Fed Chair Janet Yellen speaks at 12am, US retail sales and PPI readings scheduled for release at 1.30pm, FOMC member Harker speaks at 2.30pm, US consumer sentiment data at 3pm GMT.
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