Over the weekend I commented on how AUDUSD buyers may have more left in the tank. Yesterday’s session proved my suspicion to be accurate.
The pair has had a rough go lately. After closing below trend line support that extends from the current 2016 low, sellers pushed the pair nearly 250 pips lower in just six sessions. Make that 460 pips if we measure from the November high.
And despite recent rally efforts, my medium to long-term outlook remains bearish. With that said, yesterday’s close above 0.7440 does hint at the idea of further gains in the near-term.
For those who read my weekend commentary, you may remember the last comment about looking for intraday patterns. Well, the 1-hour formation below is one such pattern that I’ll be keeping a close eye on in the coming days.
Notice how channel resistance also lines up with previous intraday lows from November 11th to the 15th. In fact, 0.7524 was the low for the week ending November 11th.
Whether or not the 0.7524 area will produce a favorable opportunity or if the pair will even retest this area is yet to be seen.
However, keep in mind that with a channel like this, it’s prudent to wait for a close below support, which may or may not intersect with the 0.7440 handle. If it does, a break lower would be all the more convincing.
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