Daily Price Action

AUDUSD to Remain Bearish Below 0.6800


The AUDUSD has closed below three critical areas since Friday.

I wrote about the smaller ascending channel here on January 16th.

You can see how the bottom of that ascending channel interested with the AUDUSD near 0.6830.

The second and third key levels, on the other hand, broke down on Monday.

Notice how the 0.6800/10 region has been a factor for the Australian dollar since last August.

It didn’t seem to matter much on Monday, though.

Last but not least, the third critical area was the top of a descending channel that extends from December 2018.

Here’s a view of that channel from the weekly time frame:

AUDUSD descending channel from December 2018

Monday’s 0.6760 close confirms the break of all three levels, which means any retest of the area between 0.6790 and 0.6810 should attract sellers.

Of course, there’s no guarantee AUDUSD will retest that area.

But regardless of whether we get a retest or not, I’m staying bearish the AUDUSD while below the 0.6800 region.

The bearish outlook is supported by what appears to be a head and shoulders pattern that developed recently.

Judging by the 180 pip height of that pattern, we can expect a move down to the 2019 lows near 0.6680.

That said, AUDUSD sellers need to deal with 0.6750 first.

It’s the location of the November 2019 swing low, and also attracted buyers on Monday.

That 0.6750 support level may be enough to trigger a retest of the 0.6800 area as new resistance.

As always, time will tell.

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AUDUSD head and shoulders pattern on the daily time frame

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Justin Bennett says

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Feisal Rahimtoola says

Post reconfirms earlier super perceptive insights from you Justin Bennett!

Samuel says

Thanks so much for the updates please.

Emmanuel says

Mr Justin thanks so much for the update and analysis of this mkt and all you have been doing to help most of us who are beginners

sunday says

I always find your analysis helpful. Kudos.

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