"Bulls Getting Ready?" - AUDUSD to test the lows once more
Market Outlook and Analysis (2020 WW07)
Currency Pair: AUDUSD
AUDUSD D1 Chart – Supported by the 2019 lows
The Covid-19 virus as it already has enough news coverage these days, but we can’t avoid bringing it up as the wide spread virus is China is affecting the AUD. Initially reported in Wuhan, China in December 2019 and here the AUD started to drop from the highs at 0.7020 at the beginning of Jan. It has since then dropped over 350 pips.
We are currently at the 2019 support levels at 0.6670. Formed a bullish RSI divergence and bounced off the support level. AUDUSD stayed above 0.6700 for the week, snapping the 6 consecutive weeks of decline.
However, the pair could potentially test the lows again before the bulls come into the market.
AUDUSD H4 Chart – A potential Head & Shoulder
On the H4 Chart, the chart is showing us a potential classical reversal Head & Shoulders pattern at the Support Zone. Hence, I am expecting the price to dip once more before taking off.
Note of CAUTION: The health issues from China spooking the world would not come to an end so soon and we could see some choppiness in the near future.
AUDUSD H1 Chart – Bullish Bat Pattern completing at Support Zone
There could be 2 possible trading scenarios for next week:
- Price drops to the Bat completions for a Buy, or
- Price breaks above the Flag/Pennant formation to continue the bullish move up
Will continue to monitor this price movement next week
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