In the early hours of yesterday’s segment, the RBA released its latest meeting minutes. The bank highlighted concern regarding the housing market bubble which in turn saw the Aussie decline in value, eventually bringing the unit down to the 0.74 handle which happens to merge with a H4 trendline
support etched from the low 0.7475. The bounce from this number was solid and helped the pair record its fifth consecutive daily gain! While this is considered a bullish
cue on this scale, it’s advised to remain cognizant of the overall picture here. The weekly timeframe
shows price recently touched base with the underside of a resistance area
at 0.7524-0.7446, which has been in motion since mid-2016. In addition to this, the daily timeframe
also reveals that price came within touching distance of a resistance area
Our suggestions: With the bigger picture in mind, our team has absolutely no interest in buying this market today. In fact, we’re more drawn to shorts at the moment and have two areas of interest in focus:
1. The H4 mid-level hurdle at 0.7450/50.0% retracement at 0.7442. This small area represents the underside of both the aforementioned daily and weekly resistance areas.
2. May’s opening level at 0.7481/H4 61.8% Fib resistance at 0.7470. This zone is actually planted within the above said higher-timeframe areas.
To take advantage of these barriers, we would strongly recommend patiently waiting for price action to confirm seller interest beforehand. Waiting for a reasonably sized H4 bearish
candle to form, preferably a full-bodied candle, would be ideal.