H1 rising wedge looks like its about ready to pop

2020年4月22日

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 so far, 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:

Brought forward from previous analysis -

AUD/USD, based on the daily timeframe, can be found languishing south of a 61.8% Fib level at 0.6449, accompanied closely by a trendline resistance (0.7031).

It may also be worth noting that a break above the said structures shines the spotlight on a nearby supply at 0.6618/0.6544, sited just south of a 161.8% Fib ext. level at 0.6642. To the downside, demand at 0.5926/0.6062, as of current price, remains the next support target on this timeframe.

H4 timeframe:

Partially altered from previous analysis -

The harmonic Gartley formation, boasting its defining limit at the 78.6% Fib level from 0.6433, remains a focal point on the H4 timeframe. Technicians will also note additional Fibonacci studies are present around this area in the form of a 127.2% Fib ext. level at 0.6421 and a 161.8% Fib ext. level at 0.6420.

Price action, as you can see though, is having a hard time reaching demand plotted at 0.6192/0.6247. Striking this zone will likely be enough to tempt short sellers out of the said Gartley formation to reduce risk to breakeven. Some, however, may still hold out for the 38.2% Fib retracement of legs A-D, standing within the lower boundary of demand from 0.6065/0.6106 at 0.6075.

H1 timeframe:

Improved sentiment across the board provided fresh impetus to AUD/USD Wednesday, snapping a two-day losing streak. Heading into the London session, however, buyers lost their flavour at 0.6350, forming a Gravestone doji Japanese candlestick pattern. What’s also interesting on this timeframe is between 0.6302/0.6323 we have what appears to be a rising wedge continuation pattern in play. Take-profit targets are subjective, though traditionally traders tend to measure the base value and add this to the breakout point.

Structures of Interest:

Supply at 0.7029/0.6664 remains an obvious ceiling on the monthly timeframe to be aware of should we continue pursuing higher ground. Though before reaching this base, the noted daily resistances must be overthrown.

With reference to the H1 timeframe, price appears poised to break the lower edge of its rising wedge pattern, potentially unshackling downside to at least 0.63. This coupled with room to extend losses out of the current H4 Gartley pattern off 0.6433 could see sellers jump aboard any downside movement on the H1 today.