Looking to short from 0.77...
Using a top-down approach this morning, the weekly chart shows price is now trading within touching distance of a weekly trendline resistance extended from the high 0.8895, which has managed to hold the Aussie lower on two previous occasions. Turning our attention to the daily chart, the candles remain flirting with the lower edge of a daily supply area at 0.7719-0.7665 that merges nicely with the above said weekly trendline resistance. Obviously when two higher-timeframe resistance structures collide this, in our opinion, increases the chances of a bearish turnaround being seen from this region.
Jumping over to the H4 chart, price advanced north yesterday, breaking through the H4 mid-way resistance level at 0.7650 and managed to reach highs of 0.7686 by the day’s end. Although the commodity currency is selling off at the moment, we would need price to connect with the 0.77 handle before our team would look to become sellers in this seemingly overbought market. The reason being is that this number looks as though it fuses nicely with the weekly trendline resistance and sits within the extremes of the daily supply area as well as blends with a minor H4 channel resistance extended from the high 0.7637.
Our suggestions: Dependent on the time of day and H4 approach, our team would consider taking short positions from 0.77 at market, as we would then have the luxury of placing our stops above the current daily supply zone!
Jumping over to the H4 chart, price advanced north yesterday, breaking through the H4 mid-way resistance level at 0.7650 and managed to reach highs of 0.7686 by the day’s end. Although the commodity currency is selling off at the moment, we would need price to connect with the 0.77 handle before our team would look to become sellers in this seemingly overbought market. The reason being is that this number looks as though it fuses nicely with the weekly trendline resistance and sits within the extremes of the daily supply area as well as blends with a minor H4 channel resistance extended from the high 0.7637.
Our suggestions: Dependent on the time of day and H4 approach, our team would consider taking short positions from 0.77 at market, as we would then have the luxury of placing our stops above the current daily supply zone!
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