Interesting P.A on the Aussie at present
Kicking this morning’s report off with a quick look at the weekly chart shows that price remains teasing the underside of a weekly trendline resistance taken from the high 0.8163. The other key thing to note here is that a few pips above this line is a weekly supply zone marked at 0.7849-0.7752, which happens to merge with a weekly trendline resistance extended from the high 0.7835. Moving down a level to the daily chart, daily price is currently seen trading within striking distance of a daily resistance at 0.7720/daily Quasimodo resistance at 0.7734.
Swinging over to the H4 chart, the commodity currency received a boost to the upside during yesterday’s US session following the FOMC meeting. What is quite notable from a technical perspective is that price aggressively pushed above both the 0.77 handle and the H4 supply coming in at 0.7713-0.7706. Although price is now seen trading back below 0.77 at the moment, buy stops above the H4 supply zone have very likely been weakened.
Our suggestions: On the assumption that price will attempt to trade above the current H4 supply today, the next hurdle on the horizon is the aforementioned daily resistance, followed closely by the daily Quasimodo resistance (see yellow H4 box) that converges with the weekly trendline resistance (0.8163). In addition to this, we also have a potential H4 AB=CD formation in play taken from the low 0.7650 (see black arrows), which terminates around the 0.7726 neighborhood – the center of the above noted H4 yellow box!
While a short from the H4 yellow zone is tempting, one must remain cognizant of the H4 161.8% Fib ext. level at 0.7747 (not seen on the screen). This level connects beautifully with the underside of the weekly supply zone mentioned above at 0.7752. Therefore, there’s a chance that price could ignore the H4 yellow zone and head higher before selling off. So, waiting for additional confirmation within the H4 yellow zone is advised (a reasonably sized H4 bear candle should suffice).
Data points to consider: Australian private capital expenditure at 12.30am, RBA Gov. Lowe speaks at 10.30pm. US Jobless claims at 1.30pm, FOMC member Kaplan speaks at 6pm GMT.
Swinging over to the H4 chart, the commodity currency received a boost to the upside during yesterday’s US session following the FOMC meeting. What is quite notable from a technical perspective is that price aggressively pushed above both the 0.77 handle and the H4 supply coming in at 0.7713-0.7706. Although price is now seen trading back below 0.77 at the moment, buy stops above the H4 supply zone have very likely been weakened.
Our suggestions: On the assumption that price will attempt to trade above the current H4 supply today, the next hurdle on the horizon is the aforementioned daily resistance, followed closely by the daily Quasimodo resistance (see yellow H4 box) that converges with the weekly trendline resistance (0.8163). In addition to this, we also have a potential H4 AB=CD formation in play taken from the low 0.7650 (see black arrows), which terminates around the 0.7726 neighborhood – the center of the above noted H4 yellow box!
While a short from the H4 yellow zone is tempting, one must remain cognizant of the H4 161.8% Fib ext. level at 0.7747 (not seen on the screen). This level connects beautifully with the underside of the weekly supply zone mentioned above at 0.7752. Therefore, there’s a chance that price could ignore the H4 yellow zone and head higher before selling off. So, waiting for additional confirmation within the H4 yellow zone is advised (a reasonably sized H4 bear candle should suffice).
Data points to consider: Australian private capital expenditure at 12.30am, RBA Gov. Lowe speaks at 10.30pm. US Jobless claims at 1.30pm, FOMC member Kaplan speaks at 6pm GMT.
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