The second half of Monday’s trading session passed in a calm manner, as the price remained in the same narrow area for the whole period. The sentiment changed drastically on Tuesday morning when the rate shot up 28 pips in one hour.
The Aussie has been appreciated gradually against the Greenback for the past three sessions. This suggests that the rate might continue this direction until the upper channel boundary, reinforced by the weekly R1 at 0.8022, is reached. Thus, the 55-hour SMA is expected to support the rate during its up-move.
Technical indicators back this assumption, demonstrating that there is still some upside potential until historical turning points have been reached.
The Aussie has been appreciated gradually against the Greenback for the past three sessions. This suggests that the rate might continue this direction until the upper channel boundary, reinforced by the weekly R1 at 0.8022, is reached. Thus, the 55-hour SMA is expected to support the rate during its up-move.
Technical indicators back this assumption, demonstrating that there is still some upside potential until historical turning points have been reached.
Trade closed: target reached:
Despite reaching the upper boundary of a senior channel on Tuesday, the rate returned to re-test the weekly R1 at 0.8022 for the second time. The price has remained near this channel line for the last two trading sessions; however, the boundary drawn on the chart has not yet been surpassed.
The failure to reach the monthly R1 at 0.8058 indicates that the junior ascending channel is unlikely to hold any longer and is set to be breached this session. It is expected that the rate tries to test the support area formed by the 55– and 100-hour SMAs circa 0.7990 or even the 200-hour SMA at 0.7960.
In case upside risks dominate the market after all, next target is the monthly R1.
Despite reaching the upper boundary of a senior channel on Tuesday, the rate returned to re-test the weekly R1 at 0.8022 for the second time. The price has remained near this channel line for the last two trading sessions; however, the boundary drawn on the chart has not yet been surpassed.
The failure to reach the monthly R1 at 0.8058 indicates that the junior ascending channel is unlikely to hold any longer and is set to be breached this session. It is expected that the rate tries to test the support area formed by the 55– and 100-hour SMAs circa 0.7990 or even the 200-hour SMA at 0.7960.
In case upside risks dominate the market after all, next target is the monthly R1.
Comment:
Contrary to expectations, the Aussie accelerated against the US Dollar on Thursday, thus breaching a medium-term channel and confirming the formation of a steeper junior channel up. The rate rose 136 pips within one trading session and halted at the 0.8120 mark.
While testing the monthly R1 at 0.8016, the Aussie indicated a slight exhaustion of bulls; however, the 33-pip hourly surge resulted in a breakout of this level and the weekly R2. Generally, such steep periods of appreciation are followed by a pull-back, as already apparent from the last few declining candles.
The base scenario favours a retracement back to the upper line of the senior channel near 0.8040 where the 55-hour SMA and the bottom boundary of the junior channel are located.
Contrary to expectations, the Aussie accelerated against the US Dollar on Thursday, thus breaching a medium-term channel and confirming the formation of a steeper junior channel up. The rate rose 136 pips within one trading session and halted at the 0.8120 mark.
While testing the monthly R1 at 0.8016, the Aussie indicated a slight exhaustion of bulls; however, the 33-pip hourly surge resulted in a breakout of this level and the weekly R2. Generally, such steep periods of appreciation are followed by a pull-back, as already apparent from the last few declining candles.
The base scenario favours a retracement back to the upper line of the senior channel near 0.8040 where the 55-hour SMA and the bottom boundary of the junior channel are located.
Trade closed: target reached:
It was no surprise when the massive surge on Thursday and Friday was followed by a correction period, thus erasing nearly half of gains accumulated during these two days. As a result, the Aussie retraced back to 0.8040—a level where both channels coincide (the junior pattern was altered slightly to include the new changes).
Meanwhile, it seems that reaching the two-year peak at 0.8120 is likely to pressure the rate downwards. This scenario might occur today already if the Aussie breaches the bottom boundary of the junior channel.
This bearish assumption is supported by the fact that the 55-hour SMA proved to be an unbreakable upside target for this session. It is expected that the Aussie might approach the 200-hour and remain in the 0.8020/00 area.
Meanwhile, it seems that reaching the two-year peak at 0.8120 is likely to pressure the rate downwards. This scenario might occur today already if the Aussie breaches the bottom boundary of the junior channel.
This bearish assumption is supported by the fact that the 55-hour SMA proved to be an unbreakable upside target for this session. It is expected that the Aussie might approach the 200-hour and remain in the 0.8020/00 area.
During the last 24 hours, the rate managed to reach the weekly R1 and the upper channel boundary at 0.8020 and fall back down to the 55-hour SMA. Thus, the given time period has not introduced any changes to the price level.
Reaching a four-week high may pressure the rate southwards. This movement would comply with characteristics of the current channel pattern that is expected to guide the pair towards the 0.7930/0.7900 territory this week.
However, the Aussie faces a significant support area formed by the 100– and 200-hour SMAs and the weekly and monthly PPs. Thus, it is more likely that the pair trades sideways or edges slightly higher away from the above support.