The Dark Knight's Fx Series : AUDUSD Weekly Chart
Foreword : This will be the first of our FX technical analysis series by our new contributor, The Dark Knight, who happens to be an avid comic fan and collector.
Well known in the technical analysis circuit with 20 years of FX trading and charting experience behind him, I am proud to have manage to enlist his work for this website.
Enjoy reading and do give your feedback.
The Weekly Technical studies show AUDUSD consolidating within the context of a bearish (market) channel. Prior to the recent upward, the AUD spent most of the time consolidating within a sideways market of 0.7550 (Low was 0.7534) to 0.7940
(High was 0.8077). This persistent consolidation since Jan 2015 has more or less weakened the downside momentum, evident from the upward sloping negative trading oscillators seen during Q1 2015 in the weekly studies . In addition, it gave rise to a Rounding Bottom formation or Double Bottom formation given the failures at 0.7561 & 0.7534.
Near-term focus is on the sustainability above support 0.7785, as most of the technical indicators are either overbought or losing its upward momentum. A weekly close below 0.7785 could extend the consolidation phase we have seen since the beginning of this year but there is no major downside risk of concern to us.
Given the presence of the Rounding Bottom formation, along with negative Trading Oscillators such as MACD crossing upward and readings on the Momentum oscillator turning positive in the weekly studies, consider re-engaging Long AUD position near 0.7820/30 areas for a revisit of 0.8025/35, a key level where AUD needs to register a Weekly Closing price to enhance the upside correction phase. Success on this front set the stage for further upside potential towards 0.8150-0.8180 top side target.
Stop for Near- to Short- term Trader: 0.7730
Stop for Medium- to Long-Term Trader: 0.7650