Weekly
• Last Candlesticks pattern: Long white candlestick
• Time of formation: 10 Jul 2017
• Trend bias: Up
Daily
• Last Candlesticks pattern: Long white candlestick
• Time of formation: 18 Jul 2017
• Trend bias: Up
Although aussie rebounded last week to 0.8104, as the pair has dropped again after faltering below resistance at 0.8125, retaining our view that further consolidation below this recent high (with a shooting star on the daily chart followed by a black candlestick), adding credence to our view that top has possibly been formed at 0.8125 and mild downside bias remains for test of previous support at 0.7808 but break there is needed to signal retracement of recent rise has commenced and extend weakness to 0.7760-70 first.
On the upside, expect recovery to be limited to 0.7920-25 and the Tenkan-Sen (now at 0.7987) should hold, bring another decline later. A daily close above the Kijun-Sen (now at 0.7996) would defer and risk rebound to 0.8015-20 but said resistance at 0.8104 should hold, bring another decline. Only a break of 0.8104 would shift risk back to upside and signal pullback has ended, bring retest of 0.8125, break there would extend the medium term erratic rise from 0.6827 to 0.8163 resistance, then 0.8200 but reckon 0.8260-65 (61.8% projection of 0.7329-0.8066 measuring from 0.7808) would limit upside and price should falter well below another previous resistance at 0.8295.
Recommendation: Hold short entered at 0.8060 for 0.7860 with stop lowered to 0.8020
On the weekly chart, aussie met renewed selling interest at 0.8104 last week and has slipped again, retaining our near term bearishness for the retreat from 0.8125 temporary top to bring test of support at 0.7808, however, a drop below this level is needed to add credence to this view, bring retracement of recent rise to 0.7727 (50% Fibonacci retracement of 0.7329-0.8125 as well as current level of the Kijun-Sen), however, reckon downside would be limited to 0.7675-80 and 0.7630-35 (61.8% Fibonacci retracement) would hold, bring rebound later.
On the upside, whilst recovery to the Tenkan-Sen (now at 0.7967) cannot be ruled out, reckon 0.8000 would limit upside and 0.8020 should hold, bring another retreat. Above 0.8020 would risk rebound towards 0.8104 but break there is needed to signal the retreat from 0.8125 has ended, bring retest of this level later. Above said resistance at 0.8125 would extend the erratic rise from 0.6827 low to previous resistance at 0.8163, then 0.8200 but loss of upward momentum should limit upside to 0.8260-65 (61.8% projection of 0.7329-0.8066 measuring from 0.7808) and another previous resistance at 0.8295 should hold, price should falter well below 0.8390-00, bring retreat later.
