We’re seeing several of the Aussie pairs coiling for what appears to be a forthcoming move. We’ll take a look at two of those pairs but first let’s review my favorite level for the week.
Last Friday I mentioned that EURAUD has been forming some really clean levels lately and this trend line support is no exception. The market appears to have broken support with a daily close below the level, however it isn’t the most convincing break.
Therefore I’m going to watch over the next several hours to see if we can get a bearish rejection on the 4 hour time frame. This would be enough to signal that the level stands a good chance of holding as new resistance.
Summary: Watch for bearish price action on the 4 hour time frame for previous trend line support to act as new resistance.
We’ve been watching AUDNZD for a while now and there hasn’t been much to do as the pair continues to trade in the upper half of this channel. But over the last several days this market has started to coil tighter and tighter which often leads to an aggressive move.
The question is, which direction? We’ll have to wait for the market to give us the answer, but a rally from current levels might give us an opportunity to trade a break of channel resistance.
Summary: Keep an eye on this wedge that has formed and more importantly watch for a potential break of channel resistance. Remember that only a daily close above this level would signal a potential trade setup.
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