FPM Technical Analysis : AUDUSD 25 February 2020

FPM Technical Analysis : AUD/USD (25 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 -1.34% on the month.

Daily timeframe:

Partially altered outlook from previous analysis –

Hefty supply-turned demand at 0.6642/0.6520 remains in the fray on the daily timeframe, an area that fills a portion of the current monthly demand highlighted above at 0.6358/0.6839. Note price is also trading off decade lows right now.

Should the candles kick back and advance, 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).

The RSI recently re-entered oversold territory, and is on track to chalk up bullish divergence.

H4 timeframe:

Partially altered outlook from previous analysis –

Support, comprised of Fibonacci studies (161.8% Fibonacci ext. point and the 127.2% Fibonacci ext. point – green) between 0.6591/0.6606, appears to be losing grip. The pair slipped in early trade, chalking up an opening gap of more than 40 points. There’s a possibility this triggered sell stops south of 0.6591/0.6606, weakening buyers here.

Limited supply is visible to the left of current price in the event of a move north; the next base falls in around 0.6695/0.6676, coupled with an intersecting trendline resistance (0.7031).

H1 timeframe:

The 0.66 handle appears to be hanging on by a thread at the moment, but withstood a number of downside attempts on Monday. The 50-period SMA is doing a good job at capping upside, with the 100-period SMA seen drifting lower a touch higher. 0.6620 is also proving a troublesome intraday level to overcome.

Direction:

The monthly timeframe continues to challenge demand at 0.6358/0.6839, with daily price also recently getting to know supply-turned demand at 0.6642/0.6520. As of late, there’s been little in terms of an upside attempt from either zone, though we cannot rule out the possibility of fresh upside attempts, despite the primary trend supporting further downside.

The H4 candles exhibit weakness around 0.6591/0.6606, and H1 buyers are struggling to notch up anything of note to the upside off 0.66.

Right now, things are not looking too good for buyers in this market, weighed not only by shorter-term technical structure, but also heightened concerns regarding the coronavirus. Therefore, shorts appear attractive from a fundamental perspective, though this would involve selling into higher-timeframe demand and possible buying off 0.66.

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