Forex: AUD/USD needs break above 1.0350/60; corrective pattern in peril


FXstreet.com (Barcelona) - Just when technical reads appeared to indicate that a heavy Aussie may continue to track lower, especially after 1.0250 support got out of the way, strong and consistent buying emerged around 1.0225 in the European session, taking the spot rate as high as 1.0320 through NA before consolidating above 1.03, paring back Monday's losses in the process.

Whether or not the Aussie can build up on recent gains, much of it will depend on the ability and commitment from long players to take the last obvious swing high at 1.0348/50, which aligns with Feb 7/Dec 27 broken-support-turned-resistance. If buyers can regain that level, the volatile downtrend structure will start teetering, and sellers potentially stepping out of the market.

One interesting pattern identified by Fan Yang, chief technical analyst at FXTimes, is that the maximum number of pips achieved by buyers in each corrective along 2013, where four meaningful pullbacks can be observed have been 90+, and under 100 pips. "Today’s pullback has been about 95 pips so far" he notes.

According to Mr. Yang, "as a trader, you should probably be ready for both the yes and no answer. Yes means following the recently bearish trend after this 90+ pip pullback. However, a pullback above 100 pips could change things."

Fan prefers to err on the side of caution and suggests not fighting the downtrend until a push above 1.0360, and the falling channel resistance before considering a bullish outlook, which may allow further recovery to 1.0450-60, he says. In turn, "the bearish scenario has 1.0150-1.0165 key range lows in sight" he adds.

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

AUD/USD battles 0.7700 amid covid, stimulus woes-led risk-aversion

AUD/USD holds the lower ground, testing the 0.7700 level amid broad risk-aversion that has triggered a bounce in the safe-haven US dollar. Uncertainty over the US stimulus, worries over new covid strain and lockdowns weigh on the risk appetite. 

AUD/USD News

GBP/USD pressured towards 1.3650 amid risk-off, ahead of UK jobs

GBP/USD remains depressed, heading towards 1.3650. The cable responds to the fresh risk-off mood after flashing a two-day losing streak. UK virus data suggests an improvement in covid conditions, Health Secretary Matt Hancock gives credits to activity restriction measures.

GBP/USD News

Gold: Bulls target daily extension

Gold is on the verge of an upside extension on a break of weekly resistance. XAU/USD is making progress with respect to the bullish market structure following a period of consolidation in recovery of the daily correction.

Gold news

Ripple is South Korea’s most popular cryptocurrency, but XRP price stays pressured

XRP/USD bounces off intraday low of 0.2647, stays below 21-day SMA for fifth day. As per the latest report from Messari, Bitcoin and Ripple are the most popular cryptocurrencies in South Korea.

Read more

US Dollar Index: A breach of 90.00 exposes 2021 lows at 89.20

The inability of USD-bulls to push further north of recent tops in the 91.00 region in past sessions prompted sellers to return to the markts and shifted the attention to the potential continuation of the downtrend.

US Dollar Index News

Forex MAJORS

Cryptocurrencies

Signatures