Daily Price Action
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AUDUSD Looks Ready to Bounce

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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.

Click here to get access to the same charts I use.

The AUDUSD lost significant ground yesterday. After closing back above the 0.7320 area on Monday and beginning to look quite bullish, sellers erased 100 pips in just 24 hours on Thursday.

As I type this, the pair is hovering just below 0.7320. Whether the area is more significant this time around is anyone’s guess, so we’ll need to wait and see.

I would caution against selling the AUDUSD though. Despite a downtrend that has consumed most of 2018 so far, there is a falling wedge that has developed over the past few months.

I mentioned this pattern in Sunday’s forecast. If it is indeed a falling wedge and buyers can clear resistance near 0.7370, it could put an end to this short-term downtrend, at least temporarily.

A daily close above wedge resistance would expose the 0.7460/70 horizontal area. A break above that would extend the AUDUSD all the way to the June high at 0.7660/70.

Note that the 0.7660/70 area is also the 50% retracement of the year to date range. The high of that range is 0.8135 while the low was put in earlier this month at 0.7202.

That said, buyers have their work cut out for them. Before they can even think about 0.7460/70 or 0.7660/70, they need to clear falling wedge resistance on a daily closing basis (New York 5 pm EST).

They also need to get past 0.7320 if it is indeed a key level as the July lows would suggest.

Any downside pressure will likely remain capped by what is now a confluence of support near 0.7200. That’s the intersection of wedge support and the year to date low.

In summary, the AUDUSD is neither a buy or sell for me at the moment, but the narrowing downtrend since May is indicative of an imminent bounce.

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AUDUSD daily time frame

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8 comments
Grace says

Thanks as usual. Eurusd has beaten my finger badly after entering sell at the close of yesterday

Reply
    Justin Bennett says

    You’re welcome. I’m leaving EURUSD alone for now.

    Reply
    Zakhriddin says

    It was just small retracement from 23.6 fibo level formed from february high to recent low on 15 August.

    Reply
Abongile says

I bought this one yesterday evening (sast), I am looking to take profits at 0.7370 resistance. I have forecasted a slight correction,looking to resume with sellers at 0.7370 resistance.

Reply
    Justin Bennett says

    Thanks for sharing.

    Reply
Econiumworld says

Thanks. what is your view sir on gbpcad

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zali says

super

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Foxess says

The day I came across your website, i knew I were converted into a price action trader. The content you write is so easy to understand yet so detailed.Thanks

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