ICmarkets
Long

Interesting P.A being seen on the Aussie at the moment...

FX:AUDUSD   Australian Dollar/U.S. Dollar
130 0 0
Kicking off our analysis this morning with a peek at the weekly chart shows the Aussie has recently drove into the jaws of demand fixed between 0.6935-0.7046. Could this be enough to stop this 2016 sell-off we’re seeing at the moment? Well, it could well be, as down in the pits of the daily timeframe price is trading within touching distance of a major support level coming in at 0.7035. In addition to it being a previously respected number in this market, it’s also joined together with an AB=CD bull pattern completion point which could heighten the odds of a bounce from here.

Looking to the H4 chart, nevertheless, we can see that price has now tested bids at H4 demand taken from 0.7040-0.7053. If it was not for the above said daily support level lurking just below here we would look to trade this demand. Risking money at this zone, however, with such a huge level looming below is not something we’d label high probability – a fakeout is highly likely.

Given the above, our focus today will be on the 0.7035 hurdle. Blindly trading this level (setting a pending buy order) might not be the best path to take (even though it’s bolstered by weekly demand at 0.6935-0.7046) due to the sheer velocity of selling being seen at present. That being the case, we have placed an alert at this daily barrier, once/if triggered, we’ll then being looking for lower timeframe buy entries into this market.

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