All eyes on H4 supply at 0.6540/0.6464

28 thg 4, 2020

AUD/USD:

Monthly timeframe:

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

Overwhelmed by the effects of the coronavirus pandemic, the month of March scored seventeen-year lows at 0.5506 ahead of demand pencilled in from 0.5219/0.5426, before staging an impressive recovery.

The recovery move, alongside April’s advance, has landed the unit within striking distance of supply fixed at 0.7029/0.6664, intersecting with a long-term trendline resistance (1.0582).

With reference to the market’s primary trend, a downtrend has been present since mid-2011.

Daily timeframe:

Partially altered from previous analysis -

Upbeat risk sentiment, together with diminished demand for the greenback, observed AUD/USD list its fifth successive daily gain Tuesday, uncovering supply from 0.6618/0.6544. It should also be emphasised that this area comes with a 127.2% Fib ext. level at 0.6578 and a nearby 161.8% Fib ext. level at 0.6642. In addition, the RSI indicator is seen fast approaching its overbought level.

H4 timeframe:

Partially altered from previous analysis -

The harmonic Gartley formation, boasting a defining limit at the 78.6% Fib level from 0.6433, remains a focal point on the H4 timeframe, despite the week’s advance thus far. The said pattern, technically, remains valid until breaking the X point at 0.6684.

Technicians will also note we recently connected with a supply zone at 0.6540/0.6464, an area that may help push price back beneath 0.6433 and ultimately demand at 0.6432/0.6462.

H1 timeframe:

Despite an early retreat to lows at 0.6434, the pair regained its footing into Europe Tuesday and mounted the 0.65 handle. Although the psychological point echoes a fragile tone, 0.65 remains a resistance on this timeframe. In the event buyers muster enough strength to overrun 0.65, we see stacked supply between 0.6612/0.6543, whereas moves lower has trendline support in view (0.6282) and a supply-turned demand at 0.6461/0.6435.

Indicator-based traders may also want to pencil in bearish divergence out of overbought territory (black line).

Structures of Interest:

Monthly supply at 0.7029/0.6664 remains a point of interest to the upside, though in order to reach this far north traders must first contend with the noted daily resistances.

H4 supply at 0.6540/0.6464 resides a touch beneath daily supply at 0.6618/0.6544 and holds a connection to the current H4 harmonic Gartley pattern. Ultimately, sellers out of the H4 harmonic pattern will be watching for H4 demand at 0.6432/0.6462 to be taken out. A break of the current H4 supply serves as a potential warning the harmonic pattern may fail.