Thoughts on the Aussie dollar this morning...
The 0.79 handle, as you can see, continues to provide a floor of support in this market, managing to withstand several bearish attacks over the past few weeks. Despite 0.79 fusing with two H4 trendline supports (0.7874/0.7635) and being positioned within daily demand at 0.7874-0.7922, the reactions from this psychological band appear to be weakening. This – coupled with weekly price showing space for the market to trade as far down as a support area coming in at 0.7849-0.7752, we believe that 0.79 is vulnerable.
Our suggestions: On account of the above notes, our team is now watching for H4 price to close below 0.79. A close lower followed by a retest and a H4 bearish candle, preferably in the shape of a full, or near-full-bodied candle, would, in our humble opinion, be enough evidence to suggest a short. The first take-profit zone would be the H4 mid-level support at 0.7850 (largely because this denotes the top edge of the noted weekly support area), followed closely by a daily broken Quasimodo line at 0.7819.
Data points to consider: Chinese inflation figures at 2.30am GMT+1.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: Watch for H4 price to engulf 0.79 and then look to trade any retest seen thereafter (waiting for a H4 bearish candle, preferably a full, or near-full-bodied candle, to form following the retest is advised, stop loss: ideally beyond the candle’s wick).
Our suggestions: On account of the above notes, our team is now watching for H4 price to close below 0.79. A close lower followed by a retest and a H4 bearish candle, preferably in the shape of a full, or near-full-bodied candle, would, in our humble opinion, be enough evidence to suggest a short. The first take-profit zone would be the H4 mid-level support at 0.7850 (largely because this denotes the top edge of the noted weekly support area), followed closely by a daily broken Quasimodo line at 0.7819.
Data points to consider: Chinese inflation figures at 2.30am GMT+1.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: Watch for H4 price to engulf 0.79 and then look to trade any retest seen thereafter (waiting for a H4 bearish candle, preferably a full, or near-full-bodied candle, to form following the retest is advised, stop loss: ideally beyond the candle’s wick).
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