Aussie Testing Intermediate 50% Level

The AUD USD was under pressure last night for the sixth straight day, but may have found support at the 50% level of the intermediate range of .9462 to 1.0182. The Mid-Point of this range is .9822 and the Fibonacci level of this range is .9737.

The AUD USD was under pressure last night for the sixth straight day, but may have found support at the 50% level of the intermediate range of .9462 to 1.0182. The Mid-Point of this range is .9822 and the Fibonacci level of this range is .9737.

The current short-term range is .9651 to 1.0182. This range has created a retracement zone at .9917 to .9854. The main range is .8770 to 1.0182 with .9476 to .9309 its retracement zone.

It is important to look at all three ranges because although the market is down 6 days from the top, no short-term, intermediate term or long-term main bottoms have been violated, meaning the uptrend is still in tact. In addition, one should note the 50%/Fib cluster at .9822 and .9854.

Last week the Aussie broke a long-term uptrending Gann angle at .9930. Stops under this angle helped trigger an acceleration to the downside. Downtrending Gann angles come in at .9942 and 1.0062 today.

Here’s what to watch for today. If last night’s low at .9812 holds, then the market may retrace 50% of the break from the top at 1.0182. This makes .9997 a potential upside target. This is important because if a bearish trend is developing then the Aussie/Dollar has to make a secondary lower top.

The shedding of risky assets is the catalyst behind the weakness. The Dollar is getting stronger as global equity markets and commodities weaken. The Australian Dollar has been the beneficiary of greater demand for commodities. Although the Reserve Bank of Australia has been hiking interest rates while the U.S. Federal Reserve has maintained its easy money strategy, recent rises in U.S. Treasuries have encouraged traders to pare positions in the Aussie.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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