Breakout buying north of 0.61?

2020年4月6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 reclaimed more than 60% of the month’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).

April, however, currently trades lower by 2.40%.

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

Daily timeframe:

Alongside a mild recovery ahead of oversold territory on the RSI indicator, flow on the daily timeframe snapped a four-day losing streak Monday and reclaimed last Thursday and Friday’s losses. In case of further upside, last Tuesday’s high offers possible resistance at 0.6213, tailed by demand-turned supply at 0.6330/0.6245.

Failure to push higher, however, could eventually pave the way lower towards demand at 0.5710/0.5767, as well as nearby support from 0.5563.

H4 timeframe:

Partially altered from previous analysis -

A moderate supply-turned demand area at 0.6029/0.5964 welcomed price action in the later stages of last week, holding by way of an ‘indecision’ candle Thursday and pencilling in an ‘inverted hammer’ pattern late Friday – interpreted as a bullish signal.

Monday observed a stronger-than-expected recovery, with the foundation for a climb to 0.6314/0.6235 still potentially in the pipeline, comprised of a 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 oval).

A break beneath 0.6029/0.5964, on the other hand, has demand at 0.5737/0.5825 on the radar.

H1 timeframe:

With global equities closing on strong footing, AUD/USD benefitted on the back of the risk-on theme Monday. Price action firmed through the 100-period SMA and grasped the 0.61 neighbourhood into the closing stages of the session. Note the initial test formed a ‘shooting star’ candlestick formation – considered a bearish signal at peaks – and threw the RSI indicator into overbought terrain.

Further recovery gains today will see price journey through 0.61, with 0.62 likely on the hit list for breakout buyers.

Structures of Interest:

Monthly price exhibits scope for a run lower over the coming weeks; however, a test at supply from 0.7029/0.6664 is certainly not out of the question. Daily flow recovered from demand at 0.5926/0.6062, with the possibility of further buying materialising.

H4 Supply-turned demand at 0.6029/0.5964 also held ground, housed within the walls of the current daily zone. This coupled with a lacklustre reaction off 0.61 suggests buyers have the upper hand here – we may see moves higher emerge today.

Breakout buyers north of 0.61 will, as underlined above, likely target 0.62. Moves beyond here has the underside of the H4 resistance zone to target at 0.6235 and then the underside of the daily demand-turned supply at 0.6330/0.6245.