Simple Moving Average(SMA) 50-period (red), 200-period (bold, gray)
RSI-14 with Simple Moving Average 5-period of RSI attached.
Elliott Wave Principles
Market and Price Action (patterns, candlesticks)
Intraday pivots and Intermediate-term support and resistance
- AUD/USD is seen in the 4H chart with a strong rally that is now testing the 1.00 parity level. There was a crack in the US session, but the market has not accepted a break to close above. Instead, we might develop a candle with a strong tail that would suggest a bearish attempt is imminent.
- Before committing to that, let's see where the market is. It is testing the parity, level and just above that near 1.0030, is the 50% retracement and 138.2% extended retracement of the latest minor downswing. Therefore, we can treat the resistance a zone between 1.00 and 1.0030. A break above 1.0030 first targets 1.0080 in the near-term (61.8% retracement). And a break above that should be going towards the all-time high just above 1.0250.
- Furthermore, the RSI is testing 60, and for a healthy bearish scenario to be possible, it should not break above it. A slightly crack is okay, but we need to see rejection eventually from going above 60.
- Let's see if the price action in the 1H chart can offer more clues.
- The 1H chart below shows that the market is testing a rising channel support and its 200SMA. A break below that and the 0.9970 pivot should see a decline towards 0.9910 (50% retracement), with possible minor support at 0.9935 (38.2% retracement).
- The bearish scenario starts with a break below the 0.9970 pivot. However, this could be in the context of a bullish run until the market breaks below 0.9880 (61.8% retracement). An early warning would be a break below 0.9910 because that is also an area of strong rejection, which means a break below that should open up the bottom.
Will the Aussie shake off its recent correction and head back up to make fresh highs? We would love to hear what you think.
Subscribe and become a member to share your views and join live discussions as well as webinars about the markets.
Fan Yang CMT
Chief Technical Strategist
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.