AUD/USD Trade Idea + 80c Support Zone

Of course this AUD/USD 80c zone is a big support level. If my Twitter conversations are anything to go by, every man and his dog is watching it for a buy and looking to at least build into some sort of position. These institutional levels that you read online are often just obvious levels every 50 pips or so, but every now and then when you’re at a level like this, they are useful. Here is an excerpt from Sean Lee at Forextell:

Large bids are being reported towards .8000 which suggests significant optionality. There will be stops below there but local banks here in Australia seem to be of the opinion that these levels will be tough to breach.
Prime brokers are not reporting many topside trailing stops, which is interesting heading into the NFP.

For me, the setup is play the 80-82 range but from the short side. I just can’t see 80c holding on the back of this sort of USD momentum and would rather position for a fall through the level.

Today’s AUD/USD charts back up my view. That daily doji I have been watching is still looming large underneath support and buyers just have no strength here even on the back of a few good data releases. We’re still well below the red trend line resistance.

The four hour shows an alternative channel which we are again still inside and moving into resistance now. If you’re playing that 82-80c range from the short side, these are some levels that you can look to get an entry off and manage your risk around.

Shorter term, I mentioned on Twitter earlier that we are looking exactly like Tuesday. Tuesday we had Trade Balance data that beat expectation, we rallied through Asia but then got smashed overnight in the US session.

Today we had building approval data again beating expectation and pushing us out of our short term consolidation. But momentum isn’t there and sellers are waiting. Could this be history repeating itself?

Dane Williams – @danewilliamsau

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