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AUD/USD - Potential Price Bottom

The AUD/USD has been consolidating since making a low on the year at 0.7626. It then found resistance at 0.7876. After a failed attempt to break below 0.7626, price drifted higher again. After a brief consolidation last week, price is breaking higher this week, as traders try to put in a price bottom.

AUD/USD 4H Chart 2.25

(click to enlarge)

The 4H chart shows a weak breakout so far and if price falls back below 0.78, we might invalidate it. A hold above 0.78 would traders more reason to believe in a price bottom, which opens up the 0.80 handle (there is a falling trendline and the 50-day SMA right under 0.80). Just above 0.80, we should monitor the 0.8025-0.8035 area. This area is a key support/resistance pivot area seen in the daily chart.

AUD/USD Daily Chart 2/25
(click to enlarge)

Note in the daily chart that if price does get to the 0.8025-0.8035 area, it would have broken above a falling trendline that came down from the Sept 2014 high at 0.94. Even if this line breaks, a hold below 0.8025-0.8035 should maintain the bearish outlook, especially if the daily RSI also holds below 60. 

Now a break above 0.8050 might open up the next resistance area around 0.8295-0.83, which is also where the 100-day SMA resides. If price gets to this 0.83 area, we can say that it has turned from bearish to neutral. More evidence of support above 0.79 will be needed to build the case for a bullish market.