- 4H: Yesterday's AUD/USD post showed the scenario suggested by a positive reversal for a swing projection to 0.86. Here in this 4H chart, for the same scenario you see a more aggressive swing projection as well aiming at 0.8750. The RSI is holding at 40, and the market has bottomed. It is time for the market to make a decision.
- If the scenario for further correction rally fails, the bearish continuation scenario kicks in.
- There is a larger negative reversal. This is formed from a wider pattern and is a very strong signal if confirmed.
- Perhaps the 1H chart will give us better anticipation.
- 1H: The 1H chart shows possible paths to the two scenarios.It appears that the RSI is staying below 55, so a break above 55 may already be a warning of a rally attempt. But a break above 60 should be a stronger signal. In price action we are seeing a descending triangle break. A break above may warn of a rally attempt, but a break above the declining channel resistance offers a stronger signal.
- The 0.8300 area is holding as support, but this can be extended down to the 0.8250 or 61.8% retracement level. A break of this 0.8250 is needed to signal the bearish continuation scenario.
- There may be some short-term support at the 0.8100 low. Reassess scenario there.
Fan Yang Currency Analyst Commodity Trading Advisor