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I’m going to get started today on the Australian Dollar versus the US Dollar [AUDUSD]. Starting on the Daily Chart, previously this currency pair was in a downtrend. We could see that coming from the top left-hand side of the chart, all the way up into the mid-0.9700s, falling all the way back down here towards the lowest low on the chart, into the mid-0.8600s.
Now, over the past several weeks, and we’re going all the way back to January 24, where we made the lowest low on the chart. Since January 24, we have been in a little bit of a rise or uptrend as this has pushed all the way from the mid-0.8600s, now back into the 0.9000s. The mid-0.9000s. Now, over the past few days – two, three, four days -, we have seen the market finding resistance into this pink-shaded area right here in the middle of the chart.
We could see, today, the opening candle on Sunday holding here in the pink zone, but Friday, and even going back into Wednesday of last week, holding resistance into this pink-shaded area. This happens to be a major resistance level for this currency pair. We follow it back in time. We could see historical resistance right here the last time we were on the way in the downtrend. Back in January 13th, we found resistance into this pink zone.
We follow it a little farther back and we could see, all the way back here in December, multiple days – November and December – finding support on top of this pink-shaded area. So, it’s my expectation that as long as it stays underneath that key level of resistance where we found historical support and historical resistance that there’s potential for a reversal to go back down and find some support into some of these levels down here. The yellow, the blue, or the green-shaded area. And then potentially make another run towards that pink-shaded area as resistance.
Also, here on the Daily Chart, taking Fibonacci retracement measurements from the highest high at the top left of the chart down to the lowest low. Highest high to lowest low of the previous downtrend puts the .382 Fibonacci retracement level right at 0.9078. And you could see that right at the top of the pink-shaded area. There’s a little blue dashed line there. A little hard to see. You could see the number on the right-hand side of the chart. .382 – 0.9078. Top of the pink zone. So, again, as long as it stays underneath there, that’s a major level of resistance and the potential for reversal to go back down and revisit some of the areas of support.
We go back in time just a little bit and we can see this orange box that I’ve highlighted back here on the left-hand side of the lowest low. We see the pink-shaded area holding as our resistance, which we’ve already spoken about. But we go back down towards the bottom of the green-shaded area, the bottom of that orange box, down here into the mid to upper-0.8800s. You could see that green-shaded area.
Follow it back in time. You could see support, support, support all back here. We’re looking back in December. Mid December, late December, and even into January finding support. We can even see some resistance right here into late January, finding resistance underneath that green-shaded area. So, the green-shaded area historically has been support. In between that green and the pink-shaded area, we have this yellow zone where historically we see some resistance. We could see some congestion around the blue zone. Both of those levels, or all three of them – yellow, blue, and green -, have potential to show some support and make another turn towards this pink zone and potentially a breakout there, we look for it back into the mid to upper-0.9100s. The blue-shaded area just above there.
A couple other things I want to do. Actually, we can go down to the 4-Hour Chart and take a look at this because I’ll zoom out on the 4-Hour. Let’s take two different Fibonacci retracement measurements. And really, I don’t think we need to take two because they’re going to be very similar. In fact, let’s just go ahead and take one. So, what I’m going to do is I’m going to take Fibonacci and measure from the lowest low to the current high. Lowest low to the current high, and we find the .236 Fibonacci retracement level right here at 0.8971. That’s the middle or bottom portion of that yellow-shaded area. So you could see the .236 there. That becomes some support. In fact, I’m going to narrow that yellow-shaded area in just a little bit and bring it right around the 0.8963-level.
So, there’s that 0.8970-level as the .236 fib. That becomes a potential support. Beyond that, the blue-shaded area, if you take a look down here, we find the .382 Fibonacci retracement level of that same trend range sitting right here into the blue-shaded area. And then of course the 50% of that same trend range sitting into the green zone. So, we know historically all three of these levels have shown historical support and resistance. We now know that they become potential buying opportunities. So, here’s the way it’s going to shape up for the day today on the AUDUSD.
Resistance into the pink zone. We’ve seen that multiple days. As long as it stays underneath it, potential to fall back down and revisit some of these support levels. Yellow, blue, or green. A breakout above the pink-shaded area, we look for a continuation of the uptrend and a turn back towards the 0.9130s, 0.9140s, and 0.9150s, into the 0.9100s once again for the AUDUSD and a continuation of the uptrend. The other side of this: that would be a buying opportunity above the pink zone. A selling opportunity underneath the pink zone. But our next buying opportunity of course would be the yellow, the blue, or the green-shaded area, providing low risk, high reward opportunities to buy and target back towards the pink-shaded area for the AUDUSD today.
