Originally published by AxiTrader
The Australian dollar has been under pressure recently so I thought it might be useful to look at it on multiple timeframes.
Monthly
The monthly chart shows the AUD/USD in a long-term uptrend since the lows around 0.4775 in April 2001. But there has been some large variability and cycles through that time.
Since 2015 that uptrend has had less amplitude to the cycles with the highs largely constrained - on a closing basis - below the 200 month moving average.
Presently the MACD and stochastics are suggesting, along with the last three candlesticks from the recent test of the 200 month moving average, that further downside looks likely.
Weekly
Since forming the low around 0.6830 in late 2015 early 2016 the AUD/USD has been in an uptrend with multiple tests of both sides of this channel.
This week's price action saw price break both the 38.2% retracement of the rally from 2016 at 0.7635 as well as trendline support break.
On that basis the Aussie would need to close back above 0.7618 to get back inside the channel and above weekly trendline support. Certainly the stochastic is in the overbought territory but the MACD is still trending lower suggesting more weakness to come.
On that basis 0.7475/80 remains my next target. Below that it is 0.7333 and perhaps even 0.7142. A break of this last line of Fibonacci resistance would see the Aussie heading back below 70 cents to the 2016 low.
Worth noting though is that while the Aussie has been in an uptrend channel the 0.7475/80 region looks to have been an important support and resistance zone over the last 2 or so years. SO I won't be getting uber-bearish unless this region cracks.
Daily
A clear downtrend is in evidence with current parameters 0.7786 and 0.7478.
There's that zone of possible support again.
Stochastics are in the oversold zone but MACD is still pointing lower as are the 15 and 30 day EMA's. There is a convergance of these two EMA's with the mid Bollinger Bands around 0.7690/0.7710 which suggests any rally for the Aussie would be capped at this zone.
Before that though 0.7640/50 - as previous support - is likely to offer a place for bears to sell against. This zone, 0.7651 actually, is also the 38.2% retracement of the last leg lower from just above 78 cents last week.
A move back toward this level would not surprise.
4-Hours
The 4 hour charts are heavily oversold. Indeed I took back some of my AUD/USD shorts this morning on this basis alone. The MACD has turned suggesting a rally back towards the 23.6% and possibly the 38.2% retracement levels of the last sell off at 0.7613 and 0.7651 respectively.
Above that, the 0.7665/82 zone offers further resistance but only a move above 0.7712 would substantially turn the outlook.
A break of 0.7550 - recent low - would open 0.7450 as a 138.2% Fibonacci extension if a decent pullback has occurred to the 38.2% level.
Have a great day's trading.