- AUD/USD bulls are waiting patiently for a change of character in the market structure.
- Bulls eye a test of 0.6800 for the days ahead while bears await confirmation of a downside opportunity.
As per a prior analysis, AUD/USD drops heavily in risk-off markets following hawkish BoE, ECB and Federal Reserve, whereby bears were targeting a downward continuation move toward 0.6500, the thesis remains in play as the following will illustrate. However, for the immediate future, a correction towards 0.6800 could be on the cards first.
AUD/USD prior analysis
it was shown that AUD/USD had broken channel support and there were eyes on a break to the Volume Point of Control (VPC) of the late August to mid-October bear cycle:
The neckline of AUD/USD M-formation is still expected to serve as a resistance area of a restest in the coming days and that could lead to a downside continuation below the now counter-trendline to target the 0.65s.
The M-formation is still in the making. A bottom has not been confirmed yet as we are yet to see a daily first green day close that would signal the deceleration of the bearish impulse and prospects of a bullish correction of the same.
However, the upper quarter of the 0.66s is giving some support AUD and it could be time to start monitoring for a first green day close and planning the playbook on the lower time frames for a short squeeze set-up.
There is a price imbalance (PI) between 0.6736 and 0.6810 with the 61.8% ratio eyed as a confluence:
AUD/USD H1 chart
On the lower time frames, bulls will want to see a break of the trendline and prior lower high to confirm a bullish bias:
On the hourly time frame, we have seen a break in the trendline. The market is coiling sideways. We have equal lows at 0.6695 that are being pressured currently with liquidity in market orders expected below and under 0.6675 lows. A ''sweep' of the liquidity could result in a surge of demand from the bulls and ultimately provide enough fuel to take out the 0.6720 and then the 0.6736 resistance and create a change of character (CoCh) in the structure to bullish.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Follow us on Telegram
Stay updated of all the news
EUR/USD: Euro recovers ground but not re-attracting bulls yet Premium
The EUR/USD rose on Monday toward the 1.0800 area, recovering some of Friday’s slide, supported by an improvement in market sentiment, amid easing concerns on the banking sector.
GBP/USD closes in on 1.2300 as mood improves
GBP/USD has preserved its bullish momentum and advanced to the 1.2300 area in the second half of the day on Monday. The risk positive market atmosphere makes it difficult for the US Dollar to stay resilient against its rivals and fuels the pair's daily rally. Eyes on BOE Governor Bailey's speech.
Gold: XAU/USD pared losses and consolidates around $1,950.00 Premium
Spot gold trades in the $1,950 price zone, sharply down on Monday as investors move away from safe-haven assets. The sentiment is positive at the start of the week amid easing concerns related to a global banking crisis.
MicroStrategy buys $150 million worth of Bitcoin as institutional interest soars to eight-month high
Bitcoin has been noting increasing institutional interest for the last few days as whale movement on the network grew.
US Consumer Confidence Preview: No good news for Americans Premium
The United States will publish the March Conference Board Consumer Confidence index, and market players anticipate it has contracted to 101 from 102.9 in February.