Technical Analysis AUDUSD : 2014-08-07


Hello, dear traders. Today we are going to analyze the Aussie against the US dollar chart. The currency pair comes from a long term uptrend but a reversal pattern is created in the daily timeframe with prices falling to 2-month low. Currently the forex pair is below the both of the tentative falling trend lines and as we can see there is a likely bearish formation establishment. Moreover, the Moving Averages are creating negative triple cross which increases bearish expectations. The current candle of the currency pair is a bearish engulfing and has made a substantial down move in the current daily trading session also it has breached the lower Bollinger Band. However, the candle is not yet finished and therefore its signal is not valid, we have to wait to see the close of the day to make the appropriate conclusions. Towards the next support which is the 161.8% Fibonacci extension of 0.9329 to 0.9471, at 0.9240 there are not any obstacles blocking the way. Thus, based on the price analysis we would expect the currency couple to move lower at 0.9240.


At the below chart we can see the daily volumes of futures and options traded on the Chicago Mercantile Exchange. We can see that on the 28th, 29th and 30th of July volume has been increasing and on the 30th of July, at the highest of volume, prices breached support at 0.9329. Then a slight bounce up took place in the AUDUSD with volumes of trading remaining the same or even falling. Eventually leading to today’s bearish trading and we would be expecting the CME release of today’s volume of trading to confirm the validity of the bearish candle.

AUD/USD

Looking at the oscillators, MACD is gradually declining and has room for lower levels suggesting that downside could continue. The Stochastic crossed its signal line from above and OsMA is mostly neutral. In our opinion, the downside would most likely continue towards 0.9240 and if the current candle close as a big bearish engulfing then chances are for succeeding 0.9207 as well. Moreover, should the volumes of trading increase then our downside expectations would be confirmed by another analysis tool. Lastly, trading below 0.9207 there will be a double top long term reversal pattern which would signify falling structure.


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