H1 ABCD correction to complete before HTF buyers kick in?

7 thg 7, 2020

AUD/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

May’s extension, together with June’s follow-through, has supply at 0.7029/0.6664 echoing a vulnerable tone in early July, particularly as an intersecting long-term trendline resistance (1.0582) shows signs of giving way.

Regarding the market’s primary trend, a series of lower lows and lower highs have been present since mid-2011.

Daily timeframe:

Partially altered from previous analysis -

AUD/USD ousted resistance at 0.6931 Monday, with Tuesday retesting the latter as support.

The break to the upside shines focus on two trendline resistances close by (prior supports – 0.6744/0.6671), with a break unmasking another resistance at 0.7197.

Failure to maintain a position above 0.6931 will throw light back on support at 0.6755. Traders will also note the 200-day simple moving average at 0.6671 lurks just south of here, a dynamic value in the process of flattening following months of drifting lower.

H4 timeframe:

Partially altered from previous analysis -

Since June 10, H4 has been in the process of establishing a (bullish) pennant pattern between 0.7064/0.6776, generally considered a continuation pattern among chart pattern traders. As you can see, last week had price penetrate the upper boundary of the aforesaid pennant, unearthing a potential buy signal. Supply at 0.7058/0.7029 is featured as the next obstacle on this timeframe.

H1 timeframe:

The value of the Australian dollar fell against the greenback Tuesday, eventually squeezing under 0.6950. Establishing a position sub 0.6950 today could see buyers and sellers butt heads at 0.69. Technicians will also acknowledge the round number is joined closely with a support at 0.6886 and an ABCD correction.

Spinning back above 0.6950, nevertheless, throws light on supply at 0.7003/0.6987, an area containing the widely watched 0.70 value.

Structures of Interest:

Higher timeframes imply bulls maintain control at the moment, particularly if we turn higher from daily support today at 0.6931.

Intraday also has H4 pointing to higher levels: supply at 0.7058/0.7029. Before we explore higher ground, H1 puts forward the possibility of completing its ABCD correction at 0.69. Consequently, this unlocks a possible platform for buyers to consider.