AUDUSD is still bearish

AUDUSD is still bearish

By: James Ansher | Where To Trade | On:3-10-2014 06:10
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Key Highlights

  • AUDUSD at a major support level
  • Retracement expected to be limited
  • Major support and resistance level
  • Multi timeframe  analysis

AUDUSD 

The AUDUSD has been on a bearish streak since the eighth of September this year. We have however been having a bullish correction for the last three days after the pair found support at 0.8683 near the low of 2014. The bears have managed to drive the pair back above the 0. 88 level. We are interested in seeing the strength of the correction and to understand the direction of the currency in the medium term and in the short term.

From the daily chart, the retracement has not yet reached the 23.6% Fibonacci level. There are already signs that the bears are giving significant resistance at this level. If the bulls are cut off at this level it would indicate that the bears are determined to push the pair even further. In such an instance we will anticipate that the pair will successfully go below Wednesday’s low of 0.8662


AUDUSD DailyChart

AUDUSD Daily Fibonacci l retracements

Major resistance levels

  • The first resistance is 0.8834 which is the 23.6% fib retracement level
  • The low of 2nd march of this year at 0.8887 is the next resistance.
  • The monthly pivot point at 0.8942 is the third resistance it is also incidentally the 38.2% fib retracement level.

Major Support Levels

  • The first significant support level is 0.8660 which is Wednesdays low and the 2004 low and also the weekly S1.
  • The Next support is at 0.865 which is the low of 24th January.
  • The weekly S2 is our final support here at 0.8582

 

Technical Indicators

Monthly Chart

On the monthly chart, the 21 period moving average is trailing above the candles. This is a bearish sign signaling that the bearish momentum is likely to continue. 

Both the stochastic and the RSI are giving neutral signals for the pair. This signals that the bear are likely to keep pushing the currency lower.

AUDUSD Monthly Chart

AUDUSD Monthly Chart

 

Weekly chart

From the weekly chart, the 21 period moving average has made a bearish cross and is now above the candle stick this is a bearish signal showing that the bearish momentum is likely to continue in the longer term.

 

The stochastic is giving a reading of 19.79 which is an indication of potential oversold conditions. The RSI is reading 8.01 which also a bullish signals indicating that we may be at oversold conditions. This Coincides with the retracement that is beginning to take shape on the charts.

AUDUSD Weekly Chart

AUDUSD Weekly Chart

 

Daily Chart

On the daily chart, the 21period moving average is moving above the candlesticks. This indicates that the bearish momentum is likely to continue in the medium term.

The Stochastic is giving a reading of 31.01 and moving higher. This is a neutral signal that may be indicating that we are moving out of oversold conditions. The RSI is also giving a neutral signal and rising higher. This indicates that we are moving out of oversold conditions and the bearish moves may resume.

Wrap up

The bearish moves for this pair are likely to likely to continue after the current correction.  Based on the moving average across the three timeframes we have looked at there is a very strong probability for the bears to dominate even further.

 Under these conditions an excellent trading approach is to maintain a bearish bias in trades as soon as we dip below Wednesday’s lows.

James Ansher

James Ansher

When there is a will there is a trade

A successful Forex trader and expert advisor

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