Weekly Price Action Setups & Key Levels | May 8-13
AUDJPY – Yearly Support & Lows Under Threat, Bearish ST (daily chart)
Following up from my market commentary on Thursday, I’m still short the AUDJPY and currently up about +170 pips of profit early market open today.
The pair has sold off 6 of the last 8 days and was further bolstered by the RBA surprise rate cut which sent the AUD basket reeling on the week.
What is interesting to note on a technical – price action basis is the break of the major support level at 79.60 which has not seen a daily close below it this year.
The yearly lows are just below at 77.55 where the pair formed a long tailed pin bar. However the rally from here (while notable) did little to alter the longer term price action context which is a large corrective structure + balancing zone between 79.60 and 86.20.
I’m guessing bears will probably cover their shorts just before the yearly lows are reached and a small bounce ensue. However should the pair break below this level, then we’ll likely see some further unwinding with 75 and 72.50 put on notice.
Only a daily close above 80 would negate my bearish bias ST & MT.
AUDUSD – Bearish Post RBA Surprise Cut (daily chart)
After the surprise RBA cut recently, the AUDUSD had its largest 1 day decline since 2011. The pair had already formed a false break setup around 7700, and the selling from here negated any chance of bulls re-attacking the 78 handle last week.
I’m bearish ST & MT on the pair while below the 77 handle and 7500 on a daily closing basis. I’m currently short and holding for a move down towards 7250 which is the next major support level.
Traders not already short should look for weak corrective pullbacks towards 7490 and potential opportunities to short.
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