Thoughts on the AUD/USD this morning...
After digesting RBA Gov. Lowe’s comments, the commodity currency staged a modest recovery from lows of 0.7534. The advance hit a stumbling block, however, as price entered into the US segment, spending the remainder of the day consolidating 20 or so pips ahead of the 0.76 handle. Also worthy of mention is that the daily trendline resistance extended from the low 0.7159 is now firmly in the picture.
So, where does this leave us?
• Weekly structure still shows that further downside may be upon us, at least until we reach the 0.75 neighborhood. Merging with a weekly channel support extended from the low 0.6827, there’s a nice-looking weekly AB=CD (see black arrows) 161.8% Fib ext. point at 0.7496 that also aligns with a 50.0% value at 0.7475 taken from the high 0.8125.
• Daily price trading from a trendline resistance and shows room to press as far south as daily support at 0.7505.
• H4 price lurking nearby 0.76.
Suggestions: As of current prices, the 0.76 handle looks prime for a sell, in our opinion. Not only do both higher timeframes show a clear path south, there is, as mentioned above, also a daily trendline resistance bolstering 0.76. A short from 0.76, nonetheless, would only be possible if a H4 full or near-full-bodied candle formed. This is simply because psychological numbers are prone to fakeouts. Ultimately, we would be targeting 0.75 as this is a level we are looking to buy from, given weekly and daily confluence (see above).
Data points to consider: US core durable goods m/m and US unemployment claims at 1.30pm; US revised UoM consumer sentiment at 3pm; FOMC meeting minutes at 7pm GMT.
Levels to watch/live orders:
• Buys: 0.75 (stop loss: 0.7455).
• Sells: 0.76 region (waiting for a reasonably sized H4 bearish candle to form – preferably a full or near-full-bodied candle – is advised, stop loss: ideally beyond the candle’s wick).
So, where does this leave us?
• Weekly structure still shows that further downside may be upon us, at least until we reach the 0.75 neighborhood. Merging with a weekly channel support extended from the low 0.6827, there’s a nice-looking weekly AB=CD (see black arrows) 161.8% Fib ext. point at 0.7496 that also aligns with a 50.0% value at 0.7475 taken from the high 0.8125.
• Daily price trading from a trendline resistance and shows room to press as far south as daily support at 0.7505.
• H4 price lurking nearby 0.76.
Suggestions: As of current prices, the 0.76 handle looks prime for a sell, in our opinion. Not only do both higher timeframes show a clear path south, there is, as mentioned above, also a daily trendline resistance bolstering 0.76. A short from 0.76, nonetheless, would only be possible if a H4 full or near-full-bodied candle formed. This is simply because psychological numbers are prone to fakeouts. Ultimately, we would be targeting 0.75 as this is a level we are looking to buy from, given weekly and daily confluence (see above).
Data points to consider: US core durable goods m/m and US unemployment claims at 1.30pm; US revised UoM consumer sentiment at 3pm; FOMC meeting minutes at 7pm GMT.
Levels to watch/live orders:
• Buys: 0.75 (stop loss: 0.7455).
• Sells: 0.76 region (waiting for a reasonably sized H4 bearish candle to form – preferably a full or near-full-bodied candle – is advised, stop loss: ideally beyond the candle’s wick).
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