• The weekly candles recently came into contact with a marked at 0.7849-0.7752.
• The also showed price interacting with a demand at 0.7786-0.7838, which encased a broken Quasimodo level at 0.7819.
• The 0.78 handle is seen housed within the current H4 demand.
Moving forward, we can see that a decline in US housing data coupled with a technically strong Aussie, forced the commodity currency beyond 0.79 into the closing bell. On the H4 timeframe, the next upside targets can be seen around the mid-level resistance at 0.7950, shadowed closely by resistance at 0.7968. Over on the higher timeframes, however, upside looks relatively free until we reach the daily Quasimodo resistance planted at 0.7988.
Suggestions: Although both the weekly and suggest that this is a buyers’ market right now, we’re not willing to buy into the noted H4 resistances. Instead, we have our eye on the large psychological band 0.80 for potential shorts. Supporting this level is August’s opening level at 0.7998, a H4 78.6% Fib at 0.8010 (taken from the high 0.8065), a H4 Quasimodo resistance at 0.8007 and the aforementioned daily Quasimodo resistance.
As weekly price shows room for the unit to trade beyond this zone up to resistance pegged at 0.8075, we would strongly advise waiting for a H4 rotation candle (preferably in the shape of a full-bodied candle) to form from here, before pulling the trigger.
Data points to consider: Australian employment figures at 2.30am, followed by RBA assist Gov . Ellis speaking at 9.20am. US weekly unemployment claims at 1.30pm, followed later by FOMC member Kaplan speaking at 5.30pm GMT+1.
Levels to watch/live orders:
• Buys: Flat (stop loss: N/A).
• Sells: 0.80 region (waiting for a reasonably sized candle to form– in the shape of either a full, or near-full-bodied candle – is advised, stop loss: ideally beyond the candle’s wick).