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AUD/USD - Pending Breakout from a Narrow Range

The AUD/USD found a new low on the year at 0.7625 to start the month. Then, it rebounded to about 0.7875, but was held from heading higher after Friday's (2/6) strong US jobs report.

AUD/USD 1H Chart 2/10
(click to enlarge)

However, traders were not able to push AUD/USD below the range support. (range is roughly between 0.7745 and 0.7875). Today (2/10), price failed to return to the 0.7875 high and dropped back to test the 0.7745 low.

The failure to reach the high suggests weakness and a strong chance that AUD/USD will break lower. However, a push above 0.78 could invalidate this bearish bias and keep AUD/USD in neutral mode, and maybe even slightly bullish in the near-term as price holds above the 200-, 100-, and 50-hour SMAs.

A break below 0.7740 could revive a prevailing downtrend, with pressure at least towards that 0.7625 low. Let's take a look at the 4H chart:

(click to enlarge)

The 4H chart shows that the AUD/USD was actually forming an inverted head and shoulders, but the strong US NFP report prevented that from happening. Now, if price still does push higher, it is still within the larger context of a downtrend, so we should limit the bullish outlook to 0.80, where price would meet a previous resistance and the falling speedline from January.