Forex Technical Update
After breaking above a counter-trend trendline, the AUD/USD has failed to confirm. After 2 temporary cracks above the 1.0780 pivot, the AUD/USD was rejected from going above 1.08, this time falling back to the consolidation support area. Furthermore, the RSI failed to break above 60, showing inability to return to bullish momentum and instead reflects a consolidation momentum as the reading has been stuck between 40 and 60. A break below 40 thus reflects some bearish bias, and if price falls below 1.0640 support area, we first open up 1.06 (measured move) then the 1.05 (150% expansion) level in the short-term.
The 1H chart below shows that there is a pullback in the beginning of the 2/21 US trading session as the latest 3 candlesticks suggest reversal and the RSI kissed 30. If the market can hold the price below 1.07, it is a very clear sign the market is sliding toward 1.06. On the other hand, only a break above the declining trendline, and the area of moving averages (up to 1.0740) should invalidate the above short-term bearish correction scenario.
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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.
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.