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AUDUSD Bearish Outlook Remains

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On March 18th, I mentioned a potential head and shoulders pattern on AUDUSD.

A few days later, the pair closed below the neckline at 0.7650.

However, on April 14th, the Australian dollar closed back above the neckline.

Or did it?

There’s almost always more than one way to draw and interpret a key level.

That’s one of the reasons trading is such a challenging endeavor.

If we look at the AUDUSD daily time frame, you’ll see more than one way to draw the neckline of the head and shoulders pattern.

The higher placement of the level is still technically valid, and you’ll note that the AUDUSD never closed the day above it.

Additionally, the market sold off on Tuesday from a previous resistance level at 0.7820.

This makes me think that the bearish bias is still intact for the Australian dollar.

The S&P selling off this week helps to confirm my suspicion.

Today’s candle is close to a bearish engulfing range, but not quite.

We may see a bounce from the 0.7700 handle, so looking for a 50% entry of Tuesday’s range isn’t a bad idea, perhaps near 0.7750.

A daily close below 0.7700 would re-expose the 0.7520 support area, followed by 0.7400.

Alternatively, a daily close above 0.7820 would negate the bearish outlook.

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AUDUSD daily time frame

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4 comments
Justin Bennett says

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    Peter egwuatu says

    Mr Bennett, what’s going on? We have not been hearing from you for some weeks and months now on forex analysis. I really miss you like a beautiful wife. Sorry, I am not gay. I don’t know what I can do now. I get sick not hearing from you or even your write up analysis on forex. Please make haste to return. It is only from you I started learning the best way to trade forex. My question is this, when do you hear from yoh again on forex? And I also want to subscribe to your member area. Thanks!

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MARTIN MAINA says

hi

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Samuel says

Thanks for the updates.

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