The AUD/USD managed to extend gains on Tuesday; consequently surpassing December’s opening level seen on the H4 timeframe at 0.7562 and reaching a session high of 0.7580. It was at this point, things started to turn sour for the commodity currency. Helped by better-than-expected US PPI data, H4 price mildly pared gains as we entered the US segment, forcing the unit to retreat back below Dec’s open line into the close.
Technically speaking, the recent upside move is likely due to a daily support at 0.7505 and the weekly channel support extended from the low 0.6827(merges closely with a weekly 50.0% value at 0.7475 taken from the high 0.8125, and a nice-looking weekly AB=CD 161.8% Fib ext. point situated at 0.7496) currently in play. Adding to this, we do not see much higher-timeframe structure stopping the unit from adding to recent gains, since the next logical area of resistance does not come into the firing range until the daily supply zone pegged at 0.7695-0.7657.
Direction:
• Long: Ultimately, further buying is likely on the cards, despite H4 price currently finding resistance beneath Dec’s opening level at the moment. A decisive H4 close above this line, followed up with a reasonably strong retest would, in our opinion, be enough to attract fresh buyers into the market, targeting the 0.76 handle and possibly beyond.
• Short: Selling at current price is tempting since monthly opening levels usually do such a good job of holding price. However, when faced with higher-timeframe opposition, these levels tend to fatigue easily.
Data points to consider: US CPI figures at 1.30pm; FOMC interest-rate decision, economic projections and statement at 7pm; FOMC press conference at 7.30pm; FOMC member Brainard speaks at 11pm GMT.
Areas worthy of attention:
Supports: weekly channel support extended from the low 0.6827; weekly AB=CD 161.8% Fib ext. point situated at 0.7496; 07505; 0.7536.
Resistances: 0.7562; 0.76 handle; 0.7695-0.7657.
Technically speaking, the recent upside move is likely due to a daily support at 0.7505 and the weekly channel support extended from the low 0.6827(merges closely with a weekly 50.0% value at 0.7475 taken from the high 0.8125, and a nice-looking weekly AB=CD 161.8% Fib ext. point situated at 0.7496) currently in play. Adding to this, we do not see much higher-timeframe structure stopping the unit from adding to recent gains, since the next logical area of resistance does not come into the firing range until the daily supply zone pegged at 0.7695-0.7657.
Direction:
• Long: Ultimately, further buying is likely on the cards, despite H4 price currently finding resistance beneath Dec’s opening level at the moment. A decisive H4 close above this line, followed up with a reasonably strong retest would, in our opinion, be enough to attract fresh buyers into the market, targeting the 0.76 handle and possibly beyond.
• Short: Selling at current price is tempting since monthly opening levels usually do such a good job of holding price. However, when faced with higher-timeframe opposition, these levels tend to fatigue easily.
Data points to consider: US CPI figures at 1.30pm; FOMC interest-rate decision, economic projections and statement at 7pm; FOMC press conference at 7.30pm; FOMC member Brainard speaks at 11pm GMT.
Areas worthy of attention:
Supports: weekly channel support extended from the low 0.6827; weekly AB=CD 161.8% Fib ext. point situated at 0.7496; 07505; 0.7536.
Resistances: 0.7562; 0.76 handle; 0.7695-0.7657.
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