The AUD/USD H4 – Possible upward momentum building
The AUD/USD currency pair, on the H4 time-frame, was in a downtrend until the 23rd of May when a lower bottom was recorded at 0.68650. Buyers found the price attractive and demand overcame supply.
A closer look revealed that the Momentum Oscillator displayed positive divergence between point a and b compared to the price at 0.68650 and 0.68650, which also formed a double bottom. This could have alerted traders to a possible technical reversal in progress.
After the bottom at 0.68650 the market broke through the 15 and 34 Simple Moving Average, the Momentum Oscillator sliced through the zero baseline and there was a crossing of the 15 and 34 Simple Moving Averages, called a Golden Cross. All of these strengthened the possibility of a trend reversal.
A possible critical resistance level formed with a higher top was recorded on the 27th of May at 0.69390. Sellers then temporarily pushed the price lower and a higher bottom was registering later the same day at 0.69132.
If the AUS/USD breaks through the critical resistance level at 0.69390, three possible price targets may be projected from there. Attaching the Fibonacci tool to the top of the possible reversal at 0.69390 and dragging it to the bottom of the pullback at 0.69132, the following targets may be calculated. The first target can be anticipated at 0.69550 (161 %). The second price target can be predicted at 0.69808 (261.8%) and the third and final target may be expected at 0.70225 (423.6%).
If the bottom at 0.69132 is broken, the possible scenario is invalidated and will need to be re-evaluated.
As long as buyers maintain a positive sentiment and demand overcomes supply, the outlook for the AUD/USD currency pair on the H4 time-frame will remain bullish.
A closer look revealed that the Momentum Oscillator displayed positive divergence between point a and b compared to the price at 0.68650 and 0.68650, which also formed a double bottom. This could have alerted traders to a possible technical reversal in progress.
After the bottom at 0.68650 the market broke through the 15 and 34 Simple Moving Average, the Momentum Oscillator sliced through the zero baseline and there was a crossing of the 15 and 34 Simple Moving Averages, called a Golden Cross. All of these strengthened the possibility of a trend reversal.
A possible critical resistance level formed with a higher top was recorded on the 27th of May at 0.69390. Sellers then temporarily pushed the price lower and a higher bottom was registering later the same day at 0.69132.
If the AUS/USD breaks through the critical resistance level at 0.69390, three possible price targets may be projected from there. Attaching the Fibonacci tool to the top of the possible reversal at 0.69390 and dragging it to the bottom of the pullback at 0.69132, the following targets may be calculated. The first target can be anticipated at 0.69550 (161 %). The second price target can be predicted at 0.69808 (261.8%) and the third and final target may be expected at 0.70225 (423.6%).
If the bottom at 0.69132 is broken, the possible scenario is invalidated and will need to be re-evaluated.
As long as buyers maintain a positive sentiment and demand overcomes supply, the outlook for the AUD/USD currency pair on the H4 time-frame will remain bullish.
Order cancelled:
The bottom at 0.69132 was broken so the trade was cancelled.