In response to the RBA’s rate statement on Tuesday the commodity currency plunged south, consequently breaking through both the H4 mid-level support at 0.7650 and April’s opening level at 0.7632. It was only once price shook hands with the H4 trendline
support etched from the high 0.7635 (and its converging round number 0.76/H4 61.8% Fib support at 0.7603), did we see any sign of stabilization. What’s also notable from a technical perspective is that the recent move south brought weekly price down to the top edge of a support area
coming in at 0.7610-0.7543. Daily action on the other hand shows room to continue pushing lower down to the support area
formed at 0.7556-0.7523, which happens to be glued around the lower edge of the current weekly support area
Our suggestions: The space seen on the daily timeframe
for price to move lower is a little concerning. Nevertheless, the 0.76 boundary on the H4 chart not only boasts attractive H4 confluence, it is also bolstered nicely by the said weekly support area
. As such, we firmly believe that this unit is going to touch gloves with 0.7632, and possibly even the 0.7650 level today.
In the event that the current H4 candle closes as is, we will long this market with stops tightly positioned beneath the candle’s tail at 0.7597, and look to ride this market up to at least 0.7650.
Data points to consider: FOMC meeting minutes at 7pm GMT+1.