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AUD/USD is still in an up trend from the low of 0.600 in 2008. There is an obvious consolidation pattern between 1.10079 and 0.93883. For a complete long trend reversal i’m look for a break below 0.93883. Or for a continuation of the long term up trend i’m looking for a break a break above 1.10779.
To the downside i’m looking for a break below the psychological support level 0.93883.
This is is a strong support level and has acted as strong resistance in the past. It’s also a long term low in relation to 0.80675 and 0.60235. It has stalled the currency in the long term and changed the trend in the medium term. This shows that a lot of market participants are putting buy orders in at that level and a break below this level would indicate that there is now enough sellers in the market to break above a level where there was once an abundance of buyers.
This will confirm that the consolidation pattern is now over
This will confirm long term up trend has reversed
I’m expecting a lot of support around this level since it’s a long term low.
A breakout below this level will cause a market rally. This is because of the dominance of this level. A lot of market participants will be looking at this level around the globe. If it breaks they certainly won’t be buying the AUDUSD they will be selling. Why is is so dominant? You can tell due to the fact that a lot of market participants put orders in at that level. That is why the price made major support and resistance levels in the past.
This will be an extension of the medium term down trend that started at 1.08539 and will pave the way to 0.87664 level.
In the medium term the bearish bias is indicated by the swing point lower lows and lower highs (red arrows). Which indicates the bears winning the battle since there isn’t enough buying pressure in the medium term to make a new medium term high.
When the price reaches this level it will be trading below all moving averages and MACD in the daily and weekly chart showing momentum to the downside.
To the upside I am looking at a break above the 1.02241 resistance zone (purple line).
This is a resistance once support level. It a very dominant level in the market since it has stalled the currency many times. This shows that a lot of market participants are putting orders in at that level and a break above this level would indicate that there is now enough buyers in the market to break above a level where there was once an abundance of sellers.
There is a bullish bias developing with many short term higher lows (purple arrows) and higher highs, this shows the bulls winning the battle because the sellers weren't able to make a new low. The low of 0.99710 is now considered a high low in relation to 0.96168.
The low of 0.96168 will be considered a medium term higher low in relation to 0.96603 and 0.93883. This shows how the bulls are winning the battle in the medium term since the sellers aren't able to make a new low in the medium term.
It will be trading above all moving averages and the MACD indicating momentum to the upside.
The last 2 trading days days have had high volume. This indicates how market participants are buying into the currency this is particularly evidence on the last trading day.
It had a major close above parody with high volume.
This will be the start of a medium term up trend and should pave the way to 1.08539.