FPM Technical Analysis : AUD/USD 27 February 2020

FPM Technical Analysis : AUDUSD (27 February 2020)

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

Demand at 0.6358/0.6839 remains in the fight, yet price struggles to chalk up anything meaningful to the upside. An eventual break of the said demand zone has another layer of demand close by at 0.6094/0.5866, while a recovery could lead to trendline support-turned resistance (0.4776) making an appearance, followed by supply at 0.8303/0.8082.

Currently, the pair trades -2.16% on the month.

Daily timeframe:

Partially altered outlook from previous analysis –

Hefty supply-turned demand at 0.6642/0.6520 remains on the daily timeframe, albeit holding on by a thread around decade lows. Traders will also note this area fills a portion of the current monthly demand highlighted above at 0.6358/0.6839.

Should the candles kick back and advance – an unlikely scenario – the 0.6662 February 7th low may delay a recovery, with moves higher targeting familiar supply coming in at 0.6778/0.6731, which happens to intersect with trendline resistance (0.7393).

Further loss could draw the spotlight towards 0.6330/0.6245, a clear area of support.

The RSI recently re-entered oversold territory, trading at 22.30.

H4 timeframe:

The pair retained a reasonably strong underlying offer yesterday, consequently pencilling in a rather appealing area of supply at 0.6607/0.6588. With respect to support on this timeframe, the 161.8% Fibonacci extension at 0.6509 is eyed, closely tied together with channel support (0.6585).

H1 timeframe:

Ongoing Chinese coronavirus concerns, and dismal Q4 construction work completed, directed the H1 candles south of a familiar consolidation phase between 0.6587/0.6620 Wednesday, which encapsulated the round number 0.66.

With the RSI tunnelling into oversold terrain, H1 action recently formed a supply zone a touch north of 0.6550 at 0.6661/0.6652. Traders may also find use in the nearby channel support-turned resistance (0.6584).

Direction:

Higher-timeframe demand areas currently in motion echo a weakening vibe. Adding to this, technical research reveals the H4 and H1 timeframes show room to explore lower ground. As such, traders likely have their crosshairs fixed on H1 supply at 0.6661/0.6652 for possible shorting opportunities today, with downside targets set at the 0.65 handle, set just ahead of the 161.8% Fibonacci extension on the H4 timeframe at 0.6509.

Disclaimer: The information contained in this material is intended for general advice only.