The AUD USD is trading steady to lower overnight. The market has traded sideways since posting a potentially bearish closing price reversal top on Monday. The subsequent break on Tuesday confirmed the top, however, the currency pair failed to accelerate to the downside as it usually does after a top of this kind.
The AUD USD is trading steady to lower overnight. The market has traded sideways since posting a potentially bearishclosing price reversal topon Monday. The subsequent break on Tuesday confirmed the top, however, the currency pair failed to accelerate to the downside as it usually does after a top of this kind.
The closing price reversal top does not change the trend, but it represents a possible short-term change in direction. In this case, despite the solid rally from .9387, the main trend never turned up so the market remains in a downtrend. Typically this pattern starts a 2 to 3 day break equal to at least 50% of the last rally. Based on the short-term range of .9387 to 1.0371, the 50% target price is .9879.
In addition to the 50% target at .9879, an uptrending Gann angle from the .9387 bottom comes in at .9867 today. This makes .9879 to .9867 an important support cluster. It’s going to take a lot of selling pressure to reach this level today, but stranger things have happened in the past. Since the market is trading well above this support level price and time appear to be out of balance.
At this time, the Australian Dollar/U.S. Dollar is still finding some support inside of a major 50% to 61.8% retracement zone at 1.0075 to 1.0238. It may be trying to establish a support base in this zone. After the market made its reversal top, it also broke to the bearish side of a steep uptrending Gann angle at 1.0347 today. In order to put itself in an extremely bullish position, it must regain this price. Otherwise it may continue to drift sideways. A break under the 50% level at 1.0075 will be a strong sign that the market is headed lower.
Fundamentally, the Aussie like the other higher-yielding currencies is being headline driven. The uncertainty inEuropeis leading to the sideways trade. Traders are worried that European leaders won’t reach a resolution to the region’s debt crisis at the October 23 summit. The inability to break the Australian Dollar after the technical reversal on Monday is a sign that fresh shorts may be shying away from the market or that a large bid is holding up the market.
For more information contact James A. Hyerczyk at Patternpricetime.com or firstname.lastname@example.org.