H1 descending triangle formation offering potential reversal?
AUD/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
May’s extension as well as June’s follow-through has seen price test the mettle of monthly supply at 0.7029/0.6664. Technically, the area also benefits from additional resistance by way of a long-term trendline formation (1.0582).
Regarding the market’s primary trend, a series of lower lows and lower highs have been present since mid-2011.
Daily timeframe:
Partially altered from previous analysis –
Last week saw buyers and sellers on the daily timeframe square off under two trendline resistances (prior supports – 0.6744/0.6671), eventually shipping price through support from 0.6931. The beginning of the week returned with a bullish outside day formation, forcing a retest at the underside of 0.6931 on Tuesday that eventually delivered some downside on Thursday.
Support at 0.6755 also remains in view.
It may also interest traders to note the 200-day simple moving average at 0.6664 is in the process of flattening/marginally rotating higher, following months of drifting lower.
H4 timeframe:
Partially altered from previous analysis –
Tuesday threw AUD/USD into trendline resistance (prior support – 0.6856), a level joining with a 61.8% Fib ret level at 0.6947. Sellers struggled to pull anything out of the hat Wednesday, while Thursday trekked to lower terrain.
Demand at 0.6773/0.6814 deserves notice, an area that boasts a connection with a 38.2% Fib ret level at 0.6808 and sparked a 100+ pip advance at the beginning of the week.
H1 timeframe:
Since the beginning of the week, H1 has been in the process of forming a descending triangle pattern. Although it’s usual to see these form in a downtrend, they can represent reversal patterns. However, a break in either direction is equally possible.
Below, traders will note 0.68 resting as possible support. To the upside, the 100-period simple moving average may throw in some resistance, with a break pointing to 0.69/supply at 0.6932/0.6918.
Structures of Interest:
The combination of monthly supply at 0.7029/0.6664, along with monthly trendline resistance, and daily resistance at 0.6931, is likely to weigh on price today/next week, potentially guiding a move out of the H1 descending triangle to at least 0.68 (landing H4 price back at demand from 0.6773/0.6814).
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
May’s extension as well as June’s follow-through has seen price test the mettle of monthly supply at 0.7029/0.6664. Technically, the area also benefits from additional resistance by way of a long-term trendline formation (1.0582).
Regarding the market’s primary trend, a series of lower lows and lower highs have been present since mid-2011.
Daily timeframe:
Partially altered from previous analysis –
Last week saw buyers and sellers on the daily timeframe square off under two trendline resistances (prior supports – 0.6744/0.6671), eventually shipping price through support from 0.6931. The beginning of the week returned with a bullish outside day formation, forcing a retest at the underside of 0.6931 on Tuesday that eventually delivered some downside on Thursday.
Support at 0.6755 also remains in view.
It may also interest traders to note the 200-day simple moving average at 0.6664 is in the process of flattening/marginally rotating higher, following months of drifting lower.
H4 timeframe:
Partially altered from previous analysis –
Tuesday threw AUD/USD into trendline resistance (prior support – 0.6856), a level joining with a 61.8% Fib ret level at 0.6947. Sellers struggled to pull anything out of the hat Wednesday, while Thursday trekked to lower terrain.
Demand at 0.6773/0.6814 deserves notice, an area that boasts a connection with a 38.2% Fib ret level at 0.6808 and sparked a 100+ pip advance at the beginning of the week.
H1 timeframe:
Since the beginning of the week, H1 has been in the process of forming a descending triangle pattern. Although it’s usual to see these form in a downtrend, they can represent reversal patterns. However, a break in either direction is equally possible.
Below, traders will note 0.68 resting as possible support. To the upside, the 100-period simple moving average may throw in some resistance, with a break pointing to 0.69/supply at 0.6932/0.6918.
Structures of Interest:
The combination of monthly supply at 0.7029/0.6664, along with monthly trendline resistance, and daily resistance at 0.6931, is likely to weigh on price today/next week, potentially guiding a move out of the H1 descending triangle to at least 0.68 (landing H4 price back at demand from 0.6773/0.6814).