Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.
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Last Thursday I pointed out a falling wedge pattern on the AUDUSD daily time frame and titled the post, “AUDUSD bulls on the move“. The idea was that a daily close above wedge resistance (near 0.7760/70 at the time) would expose the next key resistance at 0.7870/80.
Despite Friday’s 60-pip surge, buyers were unable to close the session above wedge resistance. Instead, a bearish pin bar formed in the wake of the selling pressure.
Some were considering going short following Friday’s pin bar. However, on Sunday I gave three reasons why I didn’t view the Friday candle as a sell signal.
It’s a good thing too as Monday’s session closed well above former wedge resistance at 0.7760. At that point, I was waiting for a retest of old wedge resistance as new support.
That retest materialized just a few hours ago. Today’s session hit a low of 0.7744 before rebounding higher by 40 pips, and buyers are still pushing the envelope.
Keep in mind that Australia reports employment figures in about 10 hours at 9:30 pm EST. The result will no doubt shake things up for the Australian dollar, but at the moment things are looking relatively bullish for the AUDUSD.
As I mentioned last week, the daily close (New York 5 pm EST) above old wedge resistance exposes 0.7870/80 with a close above that opening the door to the 0.7970/80 area.
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