Reminder to keep an eyeball on 0.7481/0.7470 guys...
Weekly gain/loss: + 71 pips
Weekly closing price: 0.7456
Following four weeks of downside momentum, the pair, as you can see, recovered last week and retested the underside of a weekly resistance area penciled in at 0.7524-0.7446. This structure has been in motion since mid-2016, so there’s a reasonable chance that the bears may defend this barrier in the coming week. Should this come to fruition, the next base of interest seen below is a trendline support etched from the low 0.6827.
By the same token, daily price is also seen retesting the underside of a resistance area that’s plotted within the weekly zone at 0.7449-0.7506. However, Friday’s bullish engulfing candle is, we admit, a tad concerning here.
Leaving the 0.74 handle unchallenged, H4 bulls managed to take out the mid-level resistance at 0.7450 and come within inches of connecting with the underside of our pre-determined H4 sell zone (comprised of May’s opening level at 0.7481 and a H4 61.8% Fib resistance at 0.7470 taken from the high 0.7556 [green zone]).
Our suggestions: Depending on where the market opens on Monday, our prime focus, for now, remains around the 0.7481/0.7470 neighborhood. Not only because this H4 sell zone is encapsulated within higher-timeframe structure, but also due to the market’s overall trend facing south. And this, in our view, leads us to believe that the recent bullish move on the Aussie could, quite simply, be nothing more than a pullback.
However, as highlighted in Friday’s report, one should expect a fakeout above this H4 zone to take place. The reason for why simply comes down to the potential H4 AB=CD approach taken from the low 0.7388 (see black arrows) terminating beyond the area.
Data points to consider: RBA Assist Gov. Debelle speaks at 6.30pm. FOMC member Harker speaks at 3pm GMT+1.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 0.7481/0.7470 (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: 0.7456
Following four weeks of downside momentum, the pair, as you can see, recovered last week and retested the underside of a weekly resistance area penciled in at 0.7524-0.7446. This structure has been in motion since mid-2016, so there’s a reasonable chance that the bears may defend this barrier in the coming week. Should this come to fruition, the next base of interest seen below is a trendline support etched from the low 0.6827.
By the same token, daily price is also seen retesting the underside of a resistance area that’s plotted within the weekly zone at 0.7449-0.7506. However, Friday’s bullish engulfing candle is, we admit, a tad concerning here.
Leaving the 0.74 handle unchallenged, H4 bulls managed to take out the mid-level resistance at 0.7450 and come within inches of connecting with the underside of our pre-determined H4 sell zone (comprised of May’s opening level at 0.7481 and a H4 61.8% Fib resistance at 0.7470 taken from the high 0.7556 [green zone]).
Our suggestions: Depending on where the market opens on Monday, our prime focus, for now, remains around the 0.7481/0.7470 neighborhood. Not only because this H4 sell zone is encapsulated within higher-timeframe structure, but also due to the market’s overall trend facing south. And this, in our view, leads us to believe that the recent bullish move on the Aussie could, quite simply, be nothing more than a pullback.
However, as highlighted in Friday’s report, one should expect a fakeout above this H4 zone to take place. The reason for why simply comes down to the potential H4 AB=CD approach taken from the low 0.7388 (see black arrows) terminating beyond the area.
Data points to consider: RBA Assist Gov. Debelle speaks at 6.30pm. FOMC member Harker speaks at 3pm GMT+1.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 0.7481/0.7470 (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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