Forex Technical Update
The has been trading sideways since breaking below an important trendline on 4/3. The 1H chart shows the market after a completed ABC correction, but with no bearish continuation. Instead, it appears that the bearish wave that failed to break the 1.0240 low was just a connector wave to further corrective rally - perhaps another ABC pattern.
To the upside, consider the 200-hour simple moving average near 1.3045, then 50% retracement at 1.0352. This could be the resistance zone for the corrective, and an area of renewed selling. Also consider 61.8% retracement at 1.0378, which is around a declining trendline. If the market however rallies above 1.0415 (78.6% retracement), then a declining trendline there (seen more clearly in the 4H chart). The bearish outlook should be shelved, and we can be looking at a false breakout (in 4H chart), suggesting further upside toward 1.0460 and 1.0550 pivots.
Further correction does not necessarily mean it has to be in price. It could just be in time as in further sideways trading staying under the 1.0335 consolidation high so far. Then a break below 1.0240 first opens up 1.0150, then the parity (1.00) level.
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Fan Yang CMT is a trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.