Forex Technical Update
The 1H AUD/USD chart shows a market trying to form a double bottom with the lows near 1.03 holding twice as support. Now the market needs to clear 1.0375. It should be noted that the double bottom is forming after a 61.8% retracement of the 1.0224-1.0450 swing that broke above a declining trendline seen in higher time-frames.
Note also that the market is staying above the 200-hour SMA, and a break to the upside will show more or less a flat market taking a bullish disposition. A break above 1.04 should be a clear breakout, and should be confirmed with the RSI pushing above 60, preferably above 70 as well. The 1.0450 high is the immediate challenge, up to the 1.0465 (38.2% retracement of 1.0855-1.0224)
Above 1.0465, we open up 1.0540 (50% retracement and resistance pivot), as well as 1.06 area (near 61.8% retracement and support for a previous double top pattern). It should be noted that the bullish momentum established at the upside break of a declining trendline is still maintained as the 4H RSI reading stays above 40. Pushing above 60 will reflect a persistent bullish momentum developing and help confirm the bullish outlook toward 1.06.
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.
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