Looking to the , one can see that this pair remained capped between support (now resistance) at 0.6938 and the aforementioned weekly up until Thursday’s close. It was only once we entered into Friday’s session did this market collapse, taking out the above said support and driving deep into demand fixed between 0.6768-0.6903 (located deep within the aforementioned weekly demand).
A quick look at Friday’s sessions on the H4 show that price sold off from the large psychological resistance 0.7000 and never looked back until it connected with mid-level support 0.6850. Now, for those who read our previous report on the Aussie (http://blog.icmarkets.com/friday-15th-january-keep-an-eye-on-the-u-s-dollar-at-1-30-pm-gmt-volatility-expected/), you may recall that we took a small position long from 0.69355 on Thursday. 70% of our position was closed out at 0.7000 (as planned), and the remaining 30% got took for breakeven. Well done to any of our readers who joined us on this trade!
Given the recent move lower on the H4, price appears to have chalked up an alternate completing around 0.6821. This – coupled with both the weekly and daily timeframes trading in demand at present (see above) makes this a nice area to be looking for buys today. We would not advise entering long at market here, nevertheless, due to the possibility that price may dive lower to fill bids at psychological support 0.6800, which is also positioned deep within both the above said higher timeframe demands. Assuming however, that we manage to spot lower timeframe buying strength forming from the 0.6850/0.6820 region today, we’d jump in for a long here, targeting 0.6900 first and foremost, followed closely by the small supply at 0.6922-0.6932 and then finally supply at 0.7001-0.6977.
Levels to watch/live orders:
• Buys: 0.6820/0.6850 region Tentative – confirmation required (Stop loss: dependent on where one confirms this area).
• Sells: Flat (Stop loss: N/A).