Trading Scenario: According to our analysis before, AUDUSD did make a run to 0.9080 level where we suggest to go short proven to be right and it has fallen down to 0.8900. As we look into the charts, AUDUSD made two consecutive bearish daily closings suggesting us downtrend in place.
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AUDUSD has formed a Head and Shoulder's pattern, which is a reversal pattern. It is currently testing neck line support. AUDUSD has significant support at 0.8955, where this pair failed to break below and bounced off that level in previous attempt. Once AUDUSD breaks below the neck line support which comes at 0.8890, could drop this pair to 0.8955 level where it can find support.
If AUDUSD is able to break below 0.8955 key support level, momentum picks up on this pair for further downward extension targeting towards 0.8760 and 0.8660.
Any further upside move on this pair is likely to be capped around 0.8930 - 0.8955 level.
Entry Strategy: Selling rallies in downtrend at our suggested resistance levels.
Trade Suggestion: If price is able to break below 0.8900, go short targeting 0.8855, 0.8760 followed by 0.8660.
Alternatively if price was able to bounce to 0.8930 - 0.8955 level and reverses off go short targeting 0.8890, 0.8855, 0.8760 followed by 0.8660.
Trend Direction: Bearish.
Trend Reversal Level: 0.9210
Key Support Levels: 0.8890, 0.8855, 0.8760, 0.8660, 0.8500.
Key Resistance Levels: 0.8930,0.8955, 0.9000, 0.9040, 0.9080, 0.9140, 0.9230.