AUD/USD has been trading inside of a bullish channel since making lows in mid-December and last night’s decline following a dovish RBA statement on monetary policy has seen the pair fall to test key support. The recent drop in AUD/USD looks to have been halted by the nearly 2-month long trendline support and the 100-period simple moving average on 4-hour candlestick charts. Additionally, the 4-hour RSI indicator is also testing a long term horizontal support level which was last tested on Jan. 8 before AUD/USD rebounded after touching the same support line.
Elliott Wave analysis also suggests a continuation of the uptrend as a detailed wave count shows a possible end of wave 4. The overall count shows an extended wave 3 which appears to have ended at the top of the channel and an a-b-c correction which formed the 4th wave. This indicates that we may be at the start of wave 5 which should extend above wave 3.
If the pair continues to trade within the upwards trending channel, then we will continue to see higher lows and higher highs. As such we would view current levels as an opportunity to establish a long position while the channel base and 100-period 4-hr SMA holds as support. A sustained break below the base of the channel would negate our bullish bias and suggest the potential for a deeper correction to the downside.
Source: eSignal ForexCharts, FOREX.com
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that FOREX.com is not rendering investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. FOREX.com is regulated by the Commodity Futures Trading Commission (CFTC) in the US, by the Financial Services Authority (FSA) in the UK, the Australian Securities and Investment Commission (ASIC) in Australia, and the Financial Services Agency (FSA) in Japan.
Elliott Wave analysis also suggests a continuation of the uptrend as a detailed wave count shows a possible end of wave 4. The overall count shows an extended wave 3 which appears to have ended at the top of the channel and an a-b-c correction which formed the 4th wave. This indicates that we may be at the start of wave 5 which should extend above wave 3.
If the pair continues to trade within the upwards trending channel, then we will continue to see higher lows and higher highs. As such we would view current levels as an opportunity to establish a long position while the channel base and 100-period 4-hr SMA holds as support. A sustained break below the base of the channel would negate our bullish bias and suggest the potential for a deeper correction to the downside.
Source: eSignal ForexCharts, FOREX.com
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that FOREX.com is not rendering investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. FOREX.com is regulated by the Commodity Futures Trading Commission (CFTC) in the US, by the Financial Services Authority (FSA) in the UK, the Australian Securities and Investment Commission (ASIC) in Australia, and the Financial Services Agency (FSA) in Japan.
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