AUD/USD Is Head and Shoulder in the Daily Chart Confirmed?

• Day: The daily chart shows the market finishing a pullback that followed the break below a “naked” head and shoulder. It was naked because it was not confirmed and can actually be a continuation pattern, especially with the RSI staying above 40 since mid-June. An RSI reading that stays above 40 and can rally above 60 is at least in a range with bullish bias if not a bullish trend.
• Therefore, one confirmation for the bearish outlook in the daily is a break below 40. PRice action would probably break below 0.8800 by then and also break below the rising support lines.
• The head and shoulder may now be confirmed after yesterday’s decline and today’s apparent follow-through.
• Then, the target is at 0.8640 (50% retracement and pattern breakout projection).
• Has the pullback really been complete?

• 1H: The 1H chart shows the AUD/USD in a decline since the start of the week. I mentioned in yesterday’s video update that a break below the 61.8% retracement level is confirmation that the market has topped off in its pullback, and ready for a continuation decline.
• The 1H chart shows the market break below both simple moving averages (50 and 200-period). It is also hovering just above the 61.8% level at 0.8880/70 area.
• I would expect some kind of near-term correction rally. A rally that fails to bring the RSI above 60 should be confirmation of a finished bullish attempt and a successful start of a bearish attempt.
• This means the head and shoulder is almost complete, but not just yet. It is still a bit premature to confirm the reversal pattern until a confirmed break below 0.8870.

Fan Yang
Currency Analyst
Commodity Trading Advisor

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.

All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.

AUD/USD – Assessing Head and Shoulders

• Day: When the AUD/USD broke below 0.89, it was completing a head and shoulder pattern. Conventionally this is a reversal signal. However, the bullish scenario was still valid, so further confirmation is needed to turn consider the bearish outlook.
• The past 2 days saw a pullback. This may offer either confirmation or make the bearish scenario invalid. A break below 0.88 should suggest a decline to 0.86. This is a pattern breakout target and 50% retracement.
• Ahead of tomorrow’s Bernanke speech the AUD/USD is in the crossroads. There is bearish pressure from the topping action of the head and shoulder, but there is also support from rising supports (drawn 2 different ways).

• 4H: The break below 0.8850 invalidated our previous bullish count. Instead, it is possible that the rally t0.92 was a zig zag retracement pattern.
• The non-impulse wave suggests this is more likely a corrective pattern.
• The RSI is bearish since May, but is bullish since July, so it does not tell much for us.
• The main thing to look for is the support at 0.88 and resistance near 0.89 (61.8% retracement). A break below 0.88 after Bernanke’s speech should target 0.86.
• A break above 0.89 after the speech suggests sideways to bullish mode, and a break above 0.90 suggests a return to the bullish mode.
• Beware of an immediate headfake during the speech.

Fan Yang
Currency Analyst
Commodity Trading Advisor

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.

All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.

AUD/USD Looking at a Near-term Decline, EW Count

• 1H: Following up with an early post on AUD/USD, the rally causes some adjustments in the Elliott Wave count.
• I mentioned before that for this to be a wave b, the rally should not have a third wave up above 0.8810. The market ran up to 0.8833 completing an impulse wave that started at the beginning of the week.
• This makes me believe that first of all, we may have some further rally to test the previous top near 0.8880.
• Thus the c wave may not be able to break below 0.8634 before the market continues the rally. This would complete the consolidation as a flat instead of a zig zag.
• However if the market is supported above 0.87. we may already be in a wave 1 of the next bullish impulse wave.
• Instead I suspect if this impulse wave is an indication of further rally, that there will be support as early as 0.8730 (50% retracement of the current rally).
• There is a bearish divergence suggesting the timing is okay for a near-term correction of the latest upswing from 0.8634.

Fan Yang
Currency Analyst
Commodity Trading Advisor

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.

All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.

AUD/USD Looking at a Near-term Decline, EW Count

• 4H and 1H: Here is a look at the 4H and 1H chart. Below are daily and weekly charts. I want to anticipate the current count, and in the 4H chart, we can clearly see an impulse wave coming to an end, and therefore probably corrective waves to follow.
• It appears we already had wave a, and wave b, and may be onto wave c.
• 1H chart shows internals of b, and what would invalidate this count. Wave b should not be an impulse wave so if a rally (also an impulse type) goes above 0.8810 to form a wave (v) here in the internals, then this count is flawed, and anticipation of a c wave projection should be revised.
• Otherwise, if c=a the target is just below 0.8600, 50% retracement level. This is also a confluence of SMA 200 in the 4H chart.

• Weekly and Daily: The weekly offers a possible count. If the rally in 2009 was an impulse wave, then we may be in a correction. If we are in a correction, B wave may or may not be complete, and C wave is ahead looking at the 0.76 area.
• Another count is that we are starting an impulse wave down, which  makes that April downswing I, and the subsequent rally II. Whether II has completed is not resolved, since the rally has stopped, but has not shown reversal.
• Then a wave III can be projected even further below the projected C.
• In the daily, there is a threshold for the current rally before we have to invalidate both scenarios. If the market breaks above 0.91 (78.6% retracement), we may have a rally to test the 0.94 area.

Fan Yang
Currency Analyst
Commodity Trading Advisor

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.

All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.

Comparing Aussie Weakness to Greenback Weakness

• 4H: The AUD/USD pair in the 4H chart shows a bearish divergence. Even though the USD is weak across the board, commodity currencies such as NZD, CAD and AUD have been rivaling the weakness. These currencies may be pressured by dim outlook for global growth, with China as a barometer.
• Here is a link to a fundamental article on the AUD/USD. “Comparing the Australian and US Economies and the Impact on AUD/USD“.
• In anycase, the AUD/USD pair is not able to break above 0.8888 at the moment (61.8% retracement). If the market does, also breaking above the previous high, then I can see further Aussie strength against the greenback.
• However the bearish divergence suggests some near-term weakness in the pair.

• Daily: The daily chart shows that today’s price action may suggest at least a short-term correction the next few days. The market is respecting the 61.8% retracement again, so far.
• I want to see the AUD/USD test the SMA 50. If it bounces from it and is able to break above the 61.8% retracement (also breaking above SMA200), then a bullish outlook is born.
• The first target for this bullish outlook is a full retracement of the decline in April/May, which would bring the pair to the 0.94 area.
• The 0.94/0.95 area is a very important resistance zone, so I would not project this bullish attempt past that just yet.
• This is my preferred scenario. The alternative is a break below the rising support, and would suggest a decline towards the bottom at 0.8070.

Fan Yang
Currency Analyst
Commodity Trading Advisor

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.

All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.

AUD/USD Avoids NFP Volatility; Stalking Correction Rally

• Daily and 4H: Today, many USD and JPY pairs were volatile during the NFP release. However, AUD/USD did not, so it was unaffected by this event risk.
• The AUD/USD pair has corrected its downswing to 0.83 but has stalled at 0.85.
• Looking at the daily and 4H chart, this correction does not show significant strength relative to the prior downswing.
• The daily RSI shows that the momentum can still be indicative of an uptrend in the short-term. More likely, it is entering into a consolidation period. Possibly it will be entering a lower period of volatility after strong swings that started in May.
• Therefore, I put more probability in the market ranging in the month of July for AUD/USD, with upper resistnace at 0.8880 area, and lower support at the 0.8070 area.
• Looking at the 4H chart, there seems to be short-term bearish bias, but some near-term bullish attempt. Let’s take a look at the 1H chart to see what we can expect near the start of next week.

• 1H: The 1H chart shows the market in a correction rally to 0.8500. It then entered into a flat pattern. If the market continues to rally, it can still be a correction from the decline from 0.8770 area.
• The RSI was held mainly below 60, and this rally would probably bring the RSI above.
• However, if the rally fails to pass the previous higher near 0.8580, there is a negative reversal, and we would have a strong bearish signal. The RSI high is higher than that on  June 30, but the price high is lower than the price high on June 30. This suggests further bearish pressure.
• That is something to look out for at the start of next week.

Fan Yang
Currency Analyst
Commodity Trading Advisor

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.

All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.

AUD/USD Looking at 0.81

• Daily and 1H: The AUD/USD slid sharply yesterday, paused during the previous Asian session, but started to slide again just ahead of the US session.
• The daily shows that a slide can find some support at 0.81, the previous low in June and May.
• Before that, we see that the current swing can be projected towards 0.83. This is a counter-trend breakout approach using a 100% swing projection.

Fan Yang
Currency Analyst
Commodity Trading Advisor

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.

All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.

AUD/USD Closes Gap

• Daily and 4H: The AUD/USD is closing the gap that the market made during the opening of this week’s trading.
• Looking at the daily chart, the market was rejected from going above the 61.8% at 0.8885.
• The 4H chart shows a break below a rising support.
• So there are signs of bearish reversal, but these may be early.
• The 4H chart shows a positive reversal, so there may still be a pullback before heading lower.
• 0.85, then 0.81 are the next areas of support.

• The 1H chart shows that the RSI is breaking below 40, a sign that the bullish attempt is over.
• However, as far as timing goes, the 15 minute chart shows that the market is in oversold conditions according to the RSI. This is a good sign for the bearish outlook, but timing may be too early.
• There may still be a pullback before the bearish outlook is confirmed.

Fan Yang
Currency Analyst
Commodity Trading Advisor

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.

All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.

AUD/USD Gaps up after China Depegs RMB to USD

• Daily and 4H: China unpegged the yuan (RMB) to the USD, ending a 2-year freeze, since July 2008.  The market felt that if the Chinese currency is allowed more flexibility to appreciate, the rise in purchasing power could be positive for the economies of Australia for example, whom China imports from.
• The open gap reflects this sentiment. (Refer to article: China Ends Yuan Dollar Peg, Aussie Rallies)
• We may be in a wave 5′, or maybe it already ended after the bap failed to push above 61.8% retracement at 0.8888.
• The daily shows the market testing a declining 50-period moving average, which is widening its bearish spread with the 200-period moving average. This is an area of resistance.
• At least in the short-term there should be some consolidation. In the intermediate term, we may start the bearish continuation. towards the 0.8070 low and lower.

Fan Yang
Currency Analyst
Commodity Trading Advisor

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.

All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.

AUD/USD: Finishing up Wave (c)

• Daily and 4H: The previous post was right, the bearish divergence was followed by a very weak decline and the last 4H candle signals another bullish attempt. This sets up a positive reversal, and points to just below 0.6750. This is now the target for this correction wave (c) to be complete.
• In the daily, this is going to test the 50-period simple average. This will be the first time testing it since crossing below it in early May. The pair is already in a resistance zone starting from 0.86.
• If topping indeed occurs, a low time-frame target could be 0.85, and the 4H time-frame target would be 0.8070, the previous low.

Fan Yang
Currency Analyst
Commodity Trading Advisor

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.

All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.