Thoughts on the Aussie dollar...
Weekly gain/loss: +0.79%
Weekly closing price: 0.7858
The first week of 2018 has been a productive one for the commodity currency, as price extends December’s gains. The Aussie dollar managed to climb higher last week, despite the pair ending the year closing around the underside of a weekly supply zone penciled in at 0.7897-0.7813. In the event that the bulls continue to push, a break of this area could lead to price challenging the weekly resistance level drawn from 0.8065.
A closer look at price action on the daily timeframe reveals that the unit concluded the week touching gloves with a daily resistance area seen at 0.7897-0.7870. Not only is this zone positioned within the upper limits of the weekly supply zone highlighted above, we can also see that Friday’s trading chalked up a clear cut daily indecision candle.
Over on the H4 timeframe, it can be clearly seen that after the AUD found support above the 0.78 handle at the beginning of the week, the pair has been compressing within an ascending H4 channel (0.7778/0.7842). Friday’s dismal US job’s report saw an immediate spike to highs of 0.7868 after finding support around the 0.7843 neighborhood. Following a small pullback, the day ended printing a nice-looking bearish H4 selling wick, which missed the H4 channel resistance by a few pips.
Market direction:
Given the H4 channel resistance in view, along with the current weekly supply and daily resistance area, a pullback could be on the cards this week. However, selling at current prices would entail shorting into H4 support mentioned above at 0.7843 and the H4 channel support. For that reason, waiting for a close below and retest of 0.7843 may be the better path to take. The first take-profit target can be seen at the 0.78 handle, which happens to merge with the 2018 yearly opening level seen on the weekly timeframe at 0.7801. Therefore, one should expect some buying to be seen here!
Data points to consider: FOMC member Bostic speaks at 5.40pm; FOMC member Williams speaks at 6.35pm GMT.
Weekly closing price: 0.7858
The first week of 2018 has been a productive one for the commodity currency, as price extends December’s gains. The Aussie dollar managed to climb higher last week, despite the pair ending the year closing around the underside of a weekly supply zone penciled in at 0.7897-0.7813. In the event that the bulls continue to push, a break of this area could lead to price challenging the weekly resistance level drawn from 0.8065.
A closer look at price action on the daily timeframe reveals that the unit concluded the week touching gloves with a daily resistance area seen at 0.7897-0.7870. Not only is this zone positioned within the upper limits of the weekly supply zone highlighted above, we can also see that Friday’s trading chalked up a clear cut daily indecision candle.
Over on the H4 timeframe, it can be clearly seen that after the AUD found support above the 0.78 handle at the beginning of the week, the pair has been compressing within an ascending H4 channel (0.7778/0.7842). Friday’s dismal US job’s report saw an immediate spike to highs of 0.7868 after finding support around the 0.7843 neighborhood. Following a small pullback, the day ended printing a nice-looking bearish H4 selling wick, which missed the H4 channel resistance by a few pips.
Market direction:
Given the H4 channel resistance in view, along with the current weekly supply and daily resistance area, a pullback could be on the cards this week. However, selling at current prices would entail shorting into H4 support mentioned above at 0.7843 and the H4 channel support. For that reason, waiting for a close below and retest of 0.7843 may be the better path to take. The first take-profit target can be seen at the 0.78 handle, which happens to merge with the 2018 yearly opening level seen on the weekly timeframe at 0.7801. Therefore, one should expect some buying to be seen here!
Data points to consider: FOMC member Bostic speaks at 5.40pm; FOMC member Williams speaks at 6.35pm GMT.
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