FPM Technical Analysis : AUDUSD 26 February 2020

FPM Technical Analysis : AUD/USD (26 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 -1.37% 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 and formed a doji indecision candle on Tuesday.

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, remains in motion though appears to be losing grip, with buyers chalking up little to the upside. There’s a possibility the marginal moves south of the current zone triggered sell stops, 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:

Since the beginning of the week, the H1 candles entered into a consolidation phase between 0.6587/0.6620, encapsulating the round number 0.66. The 100-period SMA recently entered the top edge of the range, likely to serve as resistance if tested today. Outside of the current range, mid-RNs 0.6550 and 0.6650 represent feasible support and resistance.

Direction:

Outlook unchanged given lacklustre movement since the beginning of the week.

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. Despite this, 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, though continue to hold at the area, and H1 buyers and sellers continue to square off between 0.6587/0.6620.

Right now, things are not looking too good for buyers in this market (unless you’re able to trade off the lower edge of the H1 range), weighed not only by soft demand on the higher timeframes, but also heightened concerns regarding the coronavirus. Therefore, shorts appear attractive from a fundamental perspective, preferably below the current H1 range. Do bear in mind, though, this would involve selling into higher-timeframe demand, albeit potentially weakening demand.

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