A/U: levels to watch by Mary McNamara

The analysis for the Aussie unfolds much the same way as for the E/U and Kiwi: a bullish start to the week following a bullish weekly candle but a ‘Bear Flag’ pattern still looming large and as a potential Cloud on the horizon.

A/U weekly: a classic bullish-reversal ‘Inverted Hammer’ candle formed up here at the end of last week: 

AUweeklyCloud

A/U 4hr Cloud: a bullish ‘Triple Bottom’ is trying to form up here but no new bullish T/K cross just yet:

AU4hrCloud

A/U 4hr: the 0.865 continues to be very strong support. Price bounced up from here again this week. There wasn’t a 4 hr close below this level so I left the TC ‘short’ signal. 

AU4

A/U daily: the daily chart shows the developing ‘Bear Flag’ and traders will need to watch trend line breaks for clues as to the next major move here. Bullish continuation targets include the whole number levels plus the 0.92 level which is near the 61.8% fib of the recent bear move, the daily 200 EMA and it is a recent S/R level as well:

AUdaily

A/U monthly: the target for any ‘Bear Flag’ move is down near the 0.80 level and this coincides with the 61.8% fib pull back of the 2008-2011 bull run:

AUmonthly

Summary:

  • The A/U is trying to hold above the key 0.865 level. The weaker USD is helping the Aussie to achieve this for the time being.
  • There is a potential ‘Bear Flag’ forming here though and traders need to watch trend line breaks for clues as to the next major directional move.
  • A close and hold below the 0.865 level would suggest an ultimate ‘Bear Flag’ move down to the 0.80 region.
  • Bullish continuation targets include the whole number levels plus the 0.92.

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