Watching for a retest of 0.7415/0.74 for shorts
Weekly gain/loss: - 29 pips
Weekly closing price: 0.7385
The AUD/USD sustained further losses last week, bringing price down to within close proximity of a weekly trendline support extended from the low 0.6827/2016 yearly opening level at 0.7282. The week, however, concluded forming a moderately sized weekly buying tail, which could portend a retest at the weekly resistance area drawn from 0.7524-0.7446.
The story on the daily chart, nonetheless, shows price came within a cat’s whisker of connecting with the support zone at 0.7284-0.7326 on Tuesday, and rallied higher. Be that as it may, the week did conclude with price chalking up a beautiful-looking selling wick, highlighting the possibility that shorts may come into the picture today/early this week.
For those who read Friday’s report you may recall that our team underlined the likelihood of shorts coming into the market between 0.7415/0.74. The area comprised of the following: a 0.74 handle, a H4 trendline resistance extended from the low 0.7475, an AB=CD 127.2% H4 Fib ext. at 0.7409 taken from the low 0.7328 and a 38.2% H4 Fib resistance at 0.7415 pegged from the high 0.7556. As you can see, price slightly surpassed our sell zone, but held firm overall.
Our suggestions: In view of the daily selling wick and recent interaction with a highly confluent H4 sell zone, our team believes further selling may be on the cards, despite the weekly buying tail. With that being the case, we’re going to be watching for price to retest 0.7415/0.74 this week. This – coupled with a H4 bearish rotation candle, preferably a full-bodied candle, would be enough evidence, in our view, to short from here, targeting the said daily support area.
Data points to consider: Chinese Industrial production figures at 3am GMT+1.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 0.7415/0.74 (waiting for a reasonably sized H4 bear candle, preferably a full-bodied candle, to form before pulling the trigger is advised, stop loss: ideally beyond the candle’s wick).
Weekly closing price: 0.7385
The AUD/USD sustained further losses last week, bringing price down to within close proximity of a weekly trendline support extended from the low 0.6827/2016 yearly opening level at 0.7282. The week, however, concluded forming a moderately sized weekly buying tail, which could portend a retest at the weekly resistance area drawn from 0.7524-0.7446.
The story on the daily chart, nonetheless, shows price came within a cat’s whisker of connecting with the support zone at 0.7284-0.7326 on Tuesday, and rallied higher. Be that as it may, the week did conclude with price chalking up a beautiful-looking selling wick, highlighting the possibility that shorts may come into the picture today/early this week.
For those who read Friday’s report you may recall that our team underlined the likelihood of shorts coming into the market between 0.7415/0.74. The area comprised of the following: a 0.74 handle, a H4 trendline resistance extended from the low 0.7475, an AB=CD 127.2% H4 Fib ext. at 0.7409 taken from the low 0.7328 and a 38.2% H4 Fib resistance at 0.7415 pegged from the high 0.7556. As you can see, price slightly surpassed our sell zone, but held firm overall.
Our suggestions: In view of the daily selling wick and recent interaction with a highly confluent H4 sell zone, our team believes further selling may be on the cards, despite the weekly buying tail. With that being the case, we’re going to be watching for price to retest 0.7415/0.74 this week. This – coupled with a H4 bearish rotation candle, preferably a full-bodied candle, would be enough evidence, in our view, to short from here, targeting the said daily support area.
Data points to consider: Chinese Industrial production figures at 3am GMT+1.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 0.7415/0.74 (waiting for a reasonably sized H4 bear candle, preferably a full-bodied candle, to form before pulling the trigger is advised, stop loss: ideally beyond the candle’s wick).
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