Well done to anyone who took the long from the AB=CD base!!!
In our previous report (blog.icmarkets.com/wednesday-3rd-february-daily-technical-outlook-and-review/), we spoke about entering long from the base of a H4 AB=CD pattern that completed between the 127.2%/161.8% Fibonacci extensions (yellow area at 0.6978/0.7013). Our second take-profit target at psychological resistance 0.7100 was easily reached and we took final profits at H4 supply drawn from 0.7171-0.7146. We do hope some of our readers took part in this move as this was an extremely high-probability reversal zone.
As can be seen from the chart, the commodity currency recently faked above the aforementioned H4 supply and is now in the process of selling off. It really is a tough call on the Aussie’s next move! On the one hand, price has just recently retested weekly support at 0.7035 and on the other hand daily resistance at 0.7178 is now in play (also visible as resistance on the weekly chart).
However, our team is swaying more to the sell-side of this market today down to at least daily support (a recently broken resistance hurdle) at 0.7112 – effectively the psychological support 0.7100, since traders will likely be cashing in on their longs today. For traders interested in this shorting opportunity, we would advise waiting for the lower timeframes to confirm selling interest exists before taking the plunge. A break of demand, a break of a trendline support or even a collection of selling wicks at a lower timeframe resistance would suffice in our opinion.
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 0.7171-0.7146 Tentative – confirmation required (Stop loss: dependent on where one confirms this area).
As can be seen from the chart, the commodity currency recently faked above the aforementioned H4 supply and is now in the process of selling off. It really is a tough call on the Aussie’s next move! On the one hand, price has just recently retested weekly support at 0.7035 and on the other hand daily resistance at 0.7178 is now in play (also visible as resistance on the weekly chart).
However, our team is swaying more to the sell-side of this market today down to at least daily support (a recently broken resistance hurdle) at 0.7112 – effectively the psychological support 0.7100, since traders will likely be cashing in on their longs today. For traders interested in this shorting opportunity, we would advise waiting for the lower timeframes to confirm selling interest exists before taking the plunge. A break of demand, a break of a trendline support or even a collection of selling wicks at a lower timeframe resistance would suffice in our opinion.
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 0.7171-0.7146 Tentative – confirmation required (Stop loss: dependent on where one confirms this area).
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