Weekly
• Last Candlesticks pattern: Shooting doji
• Time of formation: 20 Feb 2017
• Trend bias: Sideways
Daily
• Last Candlesticks pattern: Bearish engulfing pattern
• Time of formation: 21 Mar 2017
• Trend bias: Near term down
Although aussie opened higher earlier this week and rose to as high as 0.7592, as the pair met resistance at 0.7592 and has retreated, retaining our view that further consolidation would be seen with mild downside bias for another fall to 0.7491 (last week’s low), however, break there is needed to signal the fall from 0.7750 top has resumed, bring retest of 0.7474, break there would extend this move for at least a strong retracement of the rise from 0.7158, hence further decline to 0.7450-55 (50% Fibonacci retracement of 0.7158-0.7750), then towards 0.7380-85 (61.8% Fibonacci retracement) would be seen but reckon downside would be limited to 0.7300-10.
On the upside, expect recovery to be limited to the Tenkan-Sen (now at 0.7551) and price should falter below resistance at 0.7592, bring another decline later. Only break of the Kijun-Sen (now at 0.7612, also just above resistance at 0.7611) would abort and signal first leg of decline from 0.7750 has ended, bring a stronger rebound to 0,7640-50 but resistance at 0.7680 should cap upside, price should falter below 0.7700-10, bring another decline later.
Recommendation: Hold short entered at 0.7570 for 0.7390 with stop above 0.7595.
On the weekly chart, aussie has remained confined inside near term range and further consolidation is in store, however, reckon upside would be limited to 0.7592 resistance (this week’s high), bring another decline later to 0.7468-73 (current level of the Kijun-Sen and previous support), break there would add credence to our view that the rebound from 0.7158 has ended at 0.7750, then further fall towards 0.7380-85 (61.8% Fibonacci retracement of 0.7158-0.7750) would be seen, however, reckon downside would be limited to 0.7290-00, bring recovery later.
On the upside, although further sideways trading would take place, price should falter below this week’s high at 0.7592, bring another decline. Only break of 0.7612 would risk test of resistance at 0.7680 but a sustained breach above this level is needed to signal the retreat from 0.7750 has ended instead, bring another bounce towards this level. Looking ahead, a break of 0.7778 resistance would suggest a possible upside break of early established broad range, bring further rise to 2016 high at 0.7835, above there would confirm and encourage for headway to 0.7900 and later towards psychological level at 0.8000.
