Weekly closing price: 0.7331
Weekly view: Recent weekly action shows that the AUD/USD extended its downward decline from supply at 0.7849-0.7752, resulting in price violating a channel support line extended from the low 0.6827 and diving deep into the jaws of a coming in at 0.7438-0.7315. As much as this area stretches back to mid-Aug 2015, there’s a chance, given last week’s full-bodied close, that we may see a fake lower to tag in bids around the nearby yearly opening level at 0.7282 this week.
Daily view: From Wednesday onwards last week we saw the Aussie take an absolute thrashing. The at 0.7517-0.7451 (now acting resistance) was taken out during the assault, permitting the commodity currency to cross paths with a at 0.7281-0.7334 (the above said yearly opening level is seen housed within the lower extremes of this zone) by the week’s end.
H4 view: For those who read Friday’s report you may recall our desk mentioning to watch for a close beyond the 0.74 boundary. We also highlighted that in order to trade below this number, a retest to the underside of this level alongside a reasonably sized H4 close would be required. As you can clearly see, this came to realization going into the early hours of Friday’s US session. Unfortunately we missed this move entirely. Well done to any of our readers who managed to net some green pips here, as we personally see little active H4 demand to the left of current price stopping the pair from reaching the 0.73 hurdle.
Direction for the week: Taking into account that daily action has just stepped foot into a at 0.7281-0.7334, and weekly price is lurking within the lower depths of a at 0.7438-0.7315 as well as nearby a yearly opening level at 0.7282, a rotation to the upside may be on the cards sometime this week.
Direction for today: Our expectations for price action today, given the lack of active H4 demand seen to the left, is for the Aussie to simply strike 0.73.
Our suggestions: The 0.73 handle – coupled with the yearly opening level at 0.7282, in our estimation, provides enough confluence to consider trading long. Be that as it may, this is a rather small area and is potentially liable to being faked out. Therefore, we would strongly recommend waiting for a reasonably sized H4 candle to form here before pressing the buy button.
Levels to watch/live orders:
• Buys: 0.7282/0.73 (a reasonably sized H4 close is required prior to pulling the trigger here, stop loss: ideally beyond the trigger candle).
• Sells: Flat (stop loss: N/A).