Aussie currently in a potential sell zone!
The commodity currency fell sharply in early trading yesterday on the back of disappointing Q3 GDP data. Despite this, the downside move was a short-lived one! After a few hours basing around lows of 0.7417 during Asia, the pair reversed the majority of the morning’s losses amid the London morning segment and went on to punch higher as US traders entered the fray. This has, as you can see, placed the Aussie back within the clutches of a H4 supply zone marked at 0.7500-0.7477.
As discussed in yesterday’s report, the main focal point remains between the current H4 supply zone and September’s opening level at 0.7518 (upper green zone). The zone is considered, at least by our desk, to be a fakeout area. Our reasoning simply stems from the amount of stops likely positioned above the current H4 supply, hence the expectation of a fakeout/stop run. What’s more, this region intersects beautifully with the daily trendline resistance stretched from the low 0.7407. As tempting as this area is though, one must also acknowledge weekly action currently trading from a support area at 0.7438-0.7315, thus a drive through the H4 sell zone is a possibility.
Our suggestions: As there is risk of weekly bulls pushing this market higher (see above), we would recommend waiting for a H4 bear candle to confirm seller interest at 0.7518/ 0.7500-0.7477 before pressing the sell button.
Data points to consider: Aussie Trade balance at 12.30am. US Jobless claims at 1.30pm GMT.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 0.7518/0.75 (reasonably sized H4 bearish close required prior to pulling the trigger, stop loss: ideally beyond the trigger candle).
As discussed in yesterday’s report, the main focal point remains between the current H4 supply zone and September’s opening level at 0.7518 (upper green zone). The zone is considered, at least by our desk, to be a fakeout area. Our reasoning simply stems from the amount of stops likely positioned above the current H4 supply, hence the expectation of a fakeout/stop run. What’s more, this region intersects beautifully with the daily trendline resistance stretched from the low 0.7407. As tempting as this area is though, one must also acknowledge weekly action currently trading from a support area at 0.7438-0.7315, thus a drive through the H4 sell zone is a possibility.
Our suggestions: As there is risk of weekly bulls pushing this market higher (see above), we would recommend waiting for a H4 bear candle to confirm seller interest at 0.7518/ 0.7500-0.7477 before pressing the sell button.
Data points to consider: Aussie Trade balance at 12.30am. US Jobless claims at 1.30pm GMT.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 0.7518/0.75 (reasonably sized H4 bearish close required prior to pulling the trigger, stop loss: ideally beyond the trigger candle).
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