FPM Technical Analysis : AUD/USD 28 February 2020

FPM Technical Analysis : AUDUSD (28 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 -1.86% on the month.

Daily timeframe:

Outlook brought forward 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 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 28.00.

H4 timeframe:

Supply at 0.6607/0.6588 made its debut in recent hours, capping recovery gains off multi-year lows at 0.6542. Candlestick action pencilled in a strong bearish rotation off the said supply area, closing a touch off lows, consequently displaying intent to tunnel lower today. Aside from 0.6542, the 127.2% Fibonacci ext. at 0.6516 serves as the next layer of support to keep an eye on.

H1 timeframe:

Dollar weakness and softening US Treasury yields prompted a short-term recovery Thursday. Technical buying off channel support (0.6584) and 0.6550 also likely played a role. Gains, however, were recently contained at the 100-period SMA, bolstered by a familiar range between 0.6587/0.6620, located a few points south of 0.66 and channel resistance (0.6638).

Direction:

Aired in Thursday’s analysis, we see higher-timeframe demand areas echoing a weakening vibe right now. Adding to this, short-term technical research reveals the H4 and H1 timeframes fade local structures, poised for lower levels.

Selling the rejection off H4 supply could be a route traders explore today, though H1 traders may wish to see a retest at channel resistance form before considering short trades.

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