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I’m going to get started today on the Australian Dollar versus the US Dollar [AUDUSD]. Starting here on the Daily Chart, we take a look at the long-term trend. We go all the way back here to the left-hand side of the chart, back into January. We saw the market all the way down into the 0.8660-level. And over the past several months, we saw a rally as it started moving back higher from that 0.8660-level, all the way back up to the top of the trend, back into 0.9500-level.
Since then, since capping out at 0.9500 at the beginning of July, we’ve seen a little bit of a pullback, a dip back down, pushing back into the low-0.9300s. Then a retest back into the mid-0.9400s, and now, once again, coming all the way back down into the 0.9200s. Over the past several months, and we’re going back into the end of March. I have this red box. The vertical, blue line over here on the left-hand side, in the middle actually of the chart, but on the left-hand side of the red box. We’re looking back into March 26.
We’ve kind of been stuck inside this range. This red box identified as a range. Supports down here into the mid to low-0.9200s, resistance, the top of that red box into the mid-0.9400s. So, we’ve been bouncing around. You can easily see support down here. Congestion. The yellow and the blue-shaded area the bottom of that red box. There’s been congestion in here. There’s been support. There’s been resistance, congestion inside the blue and the yellow-shaded area. Of course the top of the red box has the blue-shaded area showing resistance within that longer-term range.
A few weeks ago we also broke through the blue trend line. You could see the blue trend line coming up of the previous uptrend, which capped out up here at the 0.9500-level. We saw a push underneath that trend line, a retest underneath the trend line, and then, once again, a fall coming back to the bottom of the range. Let’s go ahead and zoom it in a little bit here on the Daily Chart so we can get a closer view of the current market. Again, there’s the fall from the top of the range and the trend line.
The orange-shaded area. I have three black X’s here to show you where our historical supports are. We see three times coming down into this orange-shaded area in the middle of our range as support. And what’s most interesting about that is currently the past three days have found resistance into that orange-shaded area. So, I would say today, on an intraday basis, this orange-shaded area will be our resistance if you’re looking to sell this currency pair in the direction of our current trend and momentum, and I say current trend and momentum. I’m looking at the past seven days. The past week where the market fell off the top of the range and began pushing down to the bottom of the range. This red box.
So, the past week has been a bearish market. If you’re looking to trade in the direction of that momentum, you’re selling into resistance, which, at this point, is right into the orange-shaded area. The 0.9320s for the AUDUSD. Now, on the other side, I know that there’s going to be some folks looking for buying in the direction of the previous longer-term trend at the bottom of the range. And that could be the blue zone, which we could see back in time between the 0.9258 and 0.9285-level. Go back along that blue zone. You see some historical resistance. Mainly this period of congestion right back here, end of April, beginning of May. You see this congestion right here in that blue zone. There’s some more resistance on the left.
The yellow-shaded area. Follow it back. Again, similar congestion here into May for the yellow-shaded area, and then you go all the way back into, again, the end of March, beginning of April, where you saw that congestion into the yellow zone. So, both the yellow and the blue-shaded area have potential to be our support, and that’s back down into the mid to upper-0.9200s. So, we have a little bit of room to play with between the orange zone and the purple-shaded area. And of course if, any time, we see the breakdown of that yellow zone, underneath the red box that you see here, and we’ll call it the 0.9230-level. If we get underneath there, it’s likely seeing a much more dramatic push back down as we push back down possibly towards 0.9100 as our next stopping point.
And I would put a black line there just to show you what I mean by that. We’re looking back to 0.9100, where these candle bodies come to a resistance into that zone. So, easily see that if we get through the yellow-shaded area at 0.9230, it’s possible that we look for a pretty decent fall back down to 0.9100. Forex Black Book trend bar is still red this week, so that gives us a little bit of a bearish bias, but we didn’t really need that to see again for the past seven days. We have been bearish from the top of the range as it’s been dropping down.
Sellers, again, looking to sell resistance or break of support. Buyers, I probably think you’re looking for more clues or more information that point to support and reversal at this point, and I don’t think we have enough evidence of reversal yet here to go back up once again. So, I still think that the bear side is what we’re going to focus in on, at least at the beginning part of this week.
Let’s take it down to the 4-Hour Chart. There is our resistance into the orange-shaded area, which we were just looking at on the Daily Chart. As long as it holds within or under there, as we have so far since market opened, we’re looking at resistance there. Support down here in the blue zone. We’re looking at a pretty decent zone between the blue and the orange-shaded area. From the bottom of the orange zone, top of the blue zone, we’re looking at about 35 or so pips. So, again, if you’re going to, on an intraday basis, sell this, you want to be as close as possible to the orange-shaded area. You want to be as close as possible to the resistance. You look to sell it. You target the support, which is the blue-shaded area.
At this point, I see absolutely no reason to buy this currency pair, sitting underneath the resistance. Let’s take a couple of things. Let’s take Fibonacci from the current high, down to the current low. And looking at that Fibonacci, .236 fib sits at 0.9321. That’s where our current resistance is. And of course above that .382 is at 0.9350. So, there gives you a good clue of resistance with the .236 at 0.9321. We take a quick trend line from the highest high, down to – let’s just put it right here at this high because that is within the downtrend. You could see just putting that trend line there, and I’m actually.
Let’s change that. Well, let’s leave it the green color. So, that shows us resistance there too. So, you see the trend line. Fibonacci here. I see absolutely no reason to buy this currency pair right now. If you’re doing anything early part of today, you’re selling this into the orange zone. You’re selling it into the Fibonacci. You’re selling it into the trend line, targeting back down to the blue-shaded area as your intraday target. And of course under the blue zone, we look for a continuation lower. Your risk in that entire scenario is that it breaks back above here and starts working its way back higher.
So, stop placements would go just above the 0.9340-level, above the orange zone. That way, if it does break out to the top side, you have minimized the loss. Buyers, that’s probably what you’re looking for. Either a dip back down to the blue zone or a breakout above the orange-shaded area today for the buyers. Forex Black Book traders, the red trend bar. I don’t know if we’ll get a new red arrow today, but if you’re going to get one, you want it to be as close as possible to this orange-shaded area and this sell zone for the AUDUSD today.
