Well done to those who shorted 0.6707/0.6715...

20 февр. 2020 г.

AUD/USD:

Monthly timeframe:

Outlook brought forward from previous analysis –

Demand at 0.6358/0.6839 remains in the fight, yet struggling to chalk up anything meaningful to the upside. An eventual break of the said demand zone has another layer of demand close by at 0.6094/0.5866, while a recovery could lead to trend line support-turned resistance (0.4776) making an appearance, followed by supply at 0.8303/0.8082.

Currently, the pair trades -0.20% on the month.

Daily timeframe:

Partially altered outlook from previous analysis –

After marginally stabbing through support at 0.6670, the pair pencilled in a three-day bullish phase. Price, nonetheless, failed to sustain gains past last Wednesday’s high at 0.6750, leaving a trendline support-turned resistance level (0.7393) unopposed.

As of current movement, we are testing support at 0.6670.

The RSI, for those who follow indicators, recently emerged from oversold territory, though appears poised to reconnect with oversold values once again.

H4 timeframe:

Since the beginning of last week, AUD/USD carved out a consolidation between supply drawn from 0.6761/0.6741 and a demand area coming in at 0.6699/0.6715. Recent selling saw the said demand’s lower edge shattered, followed up with a retest on Tuesday that held ground Wednesday.

Limited support seen until we tackle the 0.6662 February 7th low on this timeframe, but we know from the daily timeframe, support at 0.6670 is in motion and capping downside.

H1 timeframe:

In Wednesday’s analysis, the research team highlighted 0.6707/0.6715, a demand-turned supply zone, as a particularly interesting area. Fibonacci studies (127.2% ext. and a 61.8% ret) converged within the said zone, as did the 100-period SMA.

Also attractive was the fact the area was positioned above the round number 0.67. Buy stops above the psychological boundary likely provided liquidity to sell into from 0.6707/0.6715. This is appealing for larger players. The selloff from the zone on Wednesday tested daily support at 0.6670 going into US hours, which, as you can see from the H1 chart, has held ground so far. Also note the 50-period SMA holding price lower, as we write.

Well done to any readers who managed to take advantage of the recent move lower.

Direction:

Going forward, daily buyers will likely try to defend support at 0.6670. Going on recent price action, though, buyers appear fragile here, but this is difficult to judge seeing as monthly price remains within demand.

Shorter-term movement may revisit 0.67, if we can overthrow sellers at the 50-period SMA. This could lead to another retest at the H1 zone from 0.6707/0.6715 for another chance at short sales.