- A strong bearish trend on the H4 chart
- The pair trades around a significant support
- The H1 chart trades within a Bearish Pennant
- Traders are to wait for a breakout to find its intraday direction
AUD/USD Trades around Weekly Support
The pair has been down-trending on the H4 chart for the last five weeks. It made a strong bearish move last week. However, the pair found its support at 0.63800 and had its second bounce at the level as well. As of writing, the price trades around the level. Simple Moving Average 30 has been working as resistance. A bearish breakout may attract the sellers again to go short in the pair. However, it is the weekly support. Thus, the pair may need some time to consolidate and make a bearish breakout at the level. The price may find its next support around 0.62700.
On the upside, if the price makes a bullish breakout at Simple Moving Average 30, the pair may change its direction and get bullish for a while.
The H1 Chart Trades within a Pennant
After being bearish for a long time, the price made a long bullish correction last week on the H1 chart. The price had a rejection at a flipped resistance 0.64500. Then, it gets trapped within a Pennant. A bearish breakout may drive the price towards 0.63600.
On the contrary, if the price makes a bullish breakout at Pennant’s resistance, it may find its next resistance around 0.65200. It means that the Bull has more space to travel on the H1 chart than the Bear. The risk-reward ratio looks very lucrative to attract the buyers to go long.
Considering the H4 chart, the pair looks Bearish-Neutral. The H1 chart looks slightly bullish. Since the price trades around weekly support on the H4 chart, the price may make a bullish correction. The bullish correction on the H4 chart could end up producing a strong bullish move in the H1 chart.
Written by: Md Tareq Sikder, Senior Analyst Forex Prop News
Contact and follow Tareq on Twitter: @tareqfpn