Get Ready to Test 0.7800 in the Aussie
As we’ve mentioned previously it’s been a reasonably quiet day on Asian markets today. After large moves and volatility like we've seen in the past week, we often get a period of consolidation.
Prices generally move between searching for what they consider to be fair value and then consolidation. While there was some minor news out today it was nothing that had much of an impact on FX markets.
A Bounce Off Resistance
I’ve been talking about 0.7800 for a few days now and I covered it in the morning preview. 0.78400 has been a level that has held up for a few sessions and again we are looking at it now. However this time I suspect it might be a good resistance level that we can key off.
Overnight the USD gained some momentum after a week of selling and we can use that to help hold the AUD/USD down.
I’ll like this setup even more if we close in the bottom region of the candle and have a hammer style close on the 4-hr chart. There's been some long wicks that are also bearish and this has the potential to be a nice quick trade.
These are examples of candlestick patterns that have the ability to identify reversal areas.
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