Techs Calling Top; Funds Expect Reversal | $AUD $USD #RBA #forex

FX:AUDUSD   Australian Dollar / U.S. Dollar

The Aussie steamrolled over a potential counter-trend idea and marched on to loftier levels, which are now challenging significant technical patterns. In addition to predictive analysis and forecasting data calling for a reversal within the potential reversal zone (PRZ) range defined by technical data alone, a fundamental element is likely to come into play in that vicinity as well.


First, let's define some of the points in the charts:

1 - Shark pattern, defined by its unusual Zero-X-A-B-C points, where Point-C remains pending
- Shark is expected to complete at C = 0.96501
- Shark is a pre-pattern (pattern precursor) to its 5-0 Pattern acolyte

2 - A bifid Head & Shoulder, defined by two distinct shoulders and necklines
- First set of shoulders (S1) project a symmetry (h1) at 0.96436
- Second set of shoulders (S2) project a symmetry (h2) at 0.95003

3 - A 5-0 pattern aiming at a return to its Point-D, which remains HIGHLY speculative
- The 5-0 pattern is a finding of Scott Carney, worth studying on his http://www.harmonictrading.com site
- While a Shark can complete at 0.886 x 0A or 1.131 x 0A, expect a minimum retracement of 50%, hence defining the five-zero of the 5-0 pattern.


A retracement to a supportive 0.92682/0.93013 range is anticipated from the recent impulse. A break and close below 0.92266 should concern vested bulls. Otherwise, directional bias remains bullish and sees a probable continuation into the PRZ defined above, favoring TG-1 = 0.96121 as a probable target.


RBA opted last month to keep rate unchanged, although noting that a recent rallying of the currency might temporarily impact the anticipated economic recovery. Indeed, recent improvements in core economic data has pushed the pair of this export-dependent continent to increasingly higher levels. So, expect the RBA to provide verbal hints that could help counter the current appreciation of the Aussie. However, before any verbal intervention turned into monetary policy action, several months are likely to go, as long as the rate remains distanced from the 0.9500 water mark.


With all of its pattern tools out of the box, technical analysis is coming out screaming and banging at price, as it nears a narrowly-defined PRZ. A layered analysis/forecasting with my own prop system falls within this narrow PRZ, so there is little left for loftier delusions at this point.

Also, Stevens of RBA let the pair rise against a non-intervention stance, risking a near-term squeeze to higher AUD levels. But now that the positive domestic data is getting absorbed, a little RBA jawboning might suffice to keep bulls at bay. I expect this to occur within the range defined by the technical data above.

Directional bias is LONG, but I will keep the indicator at "NEUTRAL" to emphasize a nearing of significant technical levels. It will take an early market reversal sign, then a bearish market reversal signal to change it to SHORT. That will take a bit of time.


David Alcindor
Predictive Analysis and Forecasting

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(Alias: @4xForecaster)

- All my comments are founded on unshared proprietary as well as common knowledge of technical analysis: Do your own due diligence before trading any market/asset. Additionally, my signals, forecasts, analyses and directional opinions are for educational purposes only and are not trading recommendations. Again, do your own due diligence first, then seek financial advice from a licensed professional, and only then enter the market at your own perils - David Alcindor - TradingView.com Alias: 4xForecaster


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