A fakeout above 0.62 into HTF resistance may be in store

31 thg 3, 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 move reclaimed more than 70% of March’s losses, consequently drawing the pair to within reasonably close proximity 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 -

Demand-turned supply at 0.5926/0.6062 yielded Friday, consequently exposing another layer of demand-turned supply at 0.6330/0.6245, which holds a 50.0% retracement band at 0.6271.

Though Tuesday’s movement inked in a bearish outside day setting, it means little in terms of the overall picture, generating at most a retest at 0.5926/0.6062 before heading for 0.6330/0.6245.

With reference to the RSI indicator, the value is seen making headway north of 30.00, though has yet to challenge 50.00.

H4 timeframe:

Partially altered from previous analysis -

Supply-turned demand at 0.6147/0.6078 continues to hold on the H4 timeframe, withstanding a number of downside attempts in recent sessions.

The foundation for a climb to 0.6314/0.6235 is still there, despite the indifferent tone out of 0.6147/0.6078. 0.6314/0.6235 is comprised of support-turned resistance at 0.6314, a 161.8% Fib ext. level at 0.6273 and a 61.8% Fib retracement at 0.6235 (yellow).

H1 timeframe:

Since Friday, the H1 candles have been carving out a consolidation zone between the 0.62 handle and demand at 0.6034/0.6087, sited just south of the 0.61 handle. Note the 100-period SMA is also seen hovering just beneath 0.61, as of current price.

Outside of the current range, 0.63 represents resistance, encased within supply drawn from 0.6325/0.6275, whereas support beneath the aforesaid demand area can be seen in the form of the widely watched 0.60 figure.

Structures of Interest:

Range traders may seek to fade the current H1 range extremes today, in the event the limits are tested, targeting the opposing edge.

A fakeout through 0.62 could also be in store, running buy stops, testing the H4 resistance area between 0.6314/0.6235, which happens to merge with the underside of daily demand-turned supply at 0.6330/0.6245. A test of the H4 zone, followed by a close back under 0.62 will likely entice sellers into the market.