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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, two different trends that we can take a look at. First off, the previous downtrend going from the highest left of the chart, up into the mid-0.9700s, down to the low of that downtrend, going all the way down here into the mid-0.8600s. Then we began an uptrend, started climbing from the mid-0.8600s, pressuring higher and stalling out here just above the 0.9400-level.
Now, over the past couple of weeks, we have seen resistance into this green-shaded area up here at the top of our current trend. The green-shaded area, if we highlight it, goes between the 0.9380-level and the 0.9420-level. So, between 0.9380 and 0.9420, over the past few weeks, we have seen resistance here. If you follow that green-shaded area back even further back in time, you could see historical resistance all the way back here into November of 2013. You could see some congestion even back here into October 2013. So, this price zone here into the green-shaded area has been historically significant for this currency pair, and even just a couple of weeks ago, resistance causing the fall back down into the mid-0.9200s.
Now we see support there into the yellow-shaded area. We’ve been talking about that support over the past few weeks because the past ten to 12 days found support there into the yellow zone, mid-0.9200s, and now we’ve seen the rally back higher, challenging once again that same green resistance zone today. So, that will be our zone to watch today.
Let’s go ahead and zoom in just a little bit here on the Daily Chart so we could see that green zone a little bit closer. If we go over here, let’s put a couple of arrows here. As long as it stays within or under this green zone, like it did the last time, and this was five days finding resistance within, or actually a little bit more if you count these two days. Seven days finding resistance under the green zone the last time we were here, and this is going, again, back, just a couple of weeks ago, early part of April. Now here we are again.
As long as we stay within or underneath that green-shaded area, there’s resistance expected here and the potential to fall back down, similar to what happened over here. The other side of that story is, of course, if it breaks above 0.9420 and gets above this last resistance high, we’ll look for a continuation of the longer-term uptrend that’s been in place since going all the way back here into January at the very bottom of the chart.
It is an uptrend. Higher lows and higher highs continues the uptrend. We have now seen a higher low the last time we challenged the blue trend line here into the yellow-shaded area. Now, if the uptrend is going to continue, we would expect to see a higher high. So, for the day today, again, as long as it stays within or under the green zone, there could be some resistance, like what we saw back here. If, at any time, we see a break above that green zone, a continuation of the uptrend. If you’re looking to buy this currency pair, I don’t consider today a good buying opportunity, at least at the very current moment is not a good buying opportunity because we’re underneath the current resistance. If you’re looking to buy this in the direction of the trend, there’s two reasons to buy it: a dip into support or a break of that resistance that we just spoke about.
Support right now. Two different supports I’ll point out. Of course the pink-shaded are over the past two days has held as support here into 0.9317, 0.9335. That has held as support. That potentially shows some intraday support as it challenges back into that area. If it breaks underneath the pink-shaded area at any point, we look for the target back down here to the yellow-shaded area, where we found support several days ago for the AUDUSD.
So let’s go ahead and take all this information down to the 4-Hour Chart. As we get down here to the 4-Hour Chart, we can see that yesterday we did find support, indeed, there between 0.9317 and 0.9334. Zoom it out just a little so we could see further back in history. The pink-shaded area back here holding as congestion. I pointed out yesterday that we would expect congestion there into the pink zone.
So, yesterday your opportunity was for buying into the pink zone. Remember: buy low, sell high. Buy on dips into support, and yesterday was that opportunity to buy the AUDUSD as it dipped here into the pink-shaded area. If you did that, you’re now sitting with profit as it pushes back into the 0.9380s. You’re cheering on the buyers to break through the green-shaded area and continue the bullish trend. If they can’t, then we look for a fall back to the pink zone or possibly all the way back down here to the yellow-shaded area.
Forex Black Book trend bar is red, and we have recently seen a red arrow. However, I still will maintain the fact that I would always want to see a sell into resistance rather than into support. And yesterday, this red arrow shows up right into that support. So, preferably, we’d now see a new red arrow pop up now that we’re finding resistance into the green-shaded area. Then that gives us an opportunity to sell in the direction of the red trend bar for the Forex Black Book, but don’t forget about the trend.
The overall longer-term trend, represented by that blue trend line that you could see here on the chart, has been up. So, it shouldn’t surprise you if you finally see a break of this green-shaded area and a continuation of the uptrend, and over time, that trend bar turns back to green as the trend continues, so definitely watching for that. The trend is up. Intraday opportunities to sell here in the green zone. Look to short it and reversal of the trend. A break above the green zone looks for the continuation of the longer-term trend for the AUDUSD.
