AUDUSD is at a level of contention- we could go absolutely bullish or shock the market by flailing to the lows. Both scenarios are open to me, and here is why:
A Case for Sells: -we have been on a bearish assault and the recent price action indicates that we have found a lower swing high on the H4. As such, the natural expectation is that we shall continue bearish, at least to the key daily levels around 0.68540 and potentially extend to the -27% fib level around 0.67200. Just by the sheer retrace and retesting a level of structure alongside retesting the 50% fibonacci is enough to expect the pair to start off on a continuation. I also note that price on H4 is indicating a double top and a break of the neckline level (as I judge by the candle closes, not wicks). The daily TF is also indicating a clear exhaustion by the wicks on the upside of the Thursday and Friday candles. The week closed with a spinning top on the daily- clearly opening price up to the possibility of a drop. This is enough to validate sells.
A Case for Buys: -Price hit a key psychological and institutional level for AUDUSD at 0.70000. We have tested this level for four times since September 2021 and each time we had a push to the upside. As such, price had created a sweet pool of liquidity below this key level. The last two weekly candles indicate a clear drop below 0.70000 to 0.68300 and a bullish piercing back above the level. This is a classic fish for liquidity and rejection from the zone below the level.
-If you choose to examine structure on the monthly as well, you realize that price created a lower low when it dipped all the way to 0.55000 levels back in March 2020. Naturally, the next thing to create would be a lower high, especially after the epic drop from 1.1000 which begun in 2011. This for me is reason enough to expect a bullish AUD for quite a while. -If you play predictive analysis, you can also tell that the monthly COULD form an inverse head and shoulder at our current zone by going bullish.- two shoulders at 0.7000 and the head at 0.55000.
-since we have accessed liquidity and pushed back above 0.7000, I will be on the lookout for any structural shifts on H4 by breaking the latest lower swing high. IF we switch bullish, I'll be very okay taking on long term buys on this pair.
That said, the markets are not perfect and we may end up just heading down. I will play this one by the ear and comply to price action.
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