Forex Technical Update

Previous: AUD/USD at the Cusp of Completing a Head and Shoulder (2/14)



The 4H AUD/USD chart shows a market that was at the cusp of completing a head and shoulder. Even with the neckline at 1.0677 violated and a new low near 1.0640, the market still respected a rising trendline that extends back to Dec. 19. Therefore, despite some softening in February, AUD/USD is still seen in an uptrend. There is also a declining resistance going back to the Feb. high near 1.0844. At the momentum if the market rallies sharply above 1.0750, this counter-trend trendline would be broken - a bullish continuation signal. The RSI should also rise above 60 in the bullish continuation scenario. The 1.0780 pivot would be near-term resistance before 1.0843.

A failure to break above 1.0745, and a break below 1.0640 should be a bearish breakout, signaling a correction against the uptrend. The first target would be near the 1.0535 level, which is the bottom of a pivot zone. In this scenario, the RSI should confirm with a break below 40 and preferably tag 30.

This analysis is of a snapshot of the market and the anticipation based on the current conditions. Things may change, and adjustments are often needed especially when preparing for a trade. To follow up and explore trading plans and risk management techniques as well as fundamental bias and event risks, don't miss IBTrade's daily Market Intelligence Briefings live at 8:00AM EST throughout the week. To gain free access to these sessions, register at here at IBTrade. You will receive and email with the link and password before each session once you have registered.

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.