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Previous: AUD/USD - A Counter-Trend Trade Plan as Bull Market Stalls (2/9)
AUD/USD
The AUD/USD market topped off in the short-term from the 1.0843 high last week and hit our initial targets with the next being 1.06 (which at the time was also coincident with the rising trendline seen in the 4H chart. Now a break below the Friday low of 1.0637 should break below not only the rising trendline, but a neckline of a head and shoulder formation.
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The 4H chart shows a conservative projection for this breakout, taking the length of the head to neckline, and projecting that in the direction of the breakout from the neckline where it is expected to break. The near-term target is 1.06. Then if market continues to confirm downtrend, the next target would be near the 4H 200 simple moving average at about 1.0475, just above a support area that starts with 1.0467 38.2% retracement down to a pivot near 1.0450.
The 4H RSI breaking below 40 says its not consolidating, and a break below 30 says the market has bearish momentum.
This analysis if of a snapshot of the market and the anticipation based on the current conditions. Things may change, and adjustments are often needed especially when preparing for a trade. To follow up and explore trading plans and risk management techniques as well as fundamental bias and event risks, don't miss IBTrade's daily Market Intelligence Briefings live at 8:00AM EST throughout the week. To gain free access to these sessions, register at here at IBTrade. You will receive and email with the link and password before each session once you have registered.
Fan Yang CMT is the Chief Technical Strategist for IBTRADE, educator trader and main contributor for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
