Seemingly unstoppable, the Australian dollar has been on a winning streak recently. Yet the bulls wavered in their efforts not so long ago. Is it a sign that the tide is beginning to turn? Or, is it turning already?
We wrote on Monday that the recent AUD/USD upswing:
(…) brought the pair back above the two declining resistance lines, opening the way for further gains and to the resistance zone created by the 76.4% and 78.6% Fibonacci retracements.
Earlier today, the pair reached this area, and as the daily indicators haven’t flashed any sell signals, it increases the likelihood of further improvement and a test of the upper border of the rising green trend channel in the very near future.
The situation developed in line with the above, and the pair overcame the mentioned
resistance line on Tuesday. The bulls however didn’t manage to keep all the ground gained, and a lower open followed earlier today. This means that a bearish gap has been created, invalidating the earlier breakout above the rising green trend channel.
This is certainly a bearish development that increases the probability of further deterioration in the coming days. But such price action will be more likely and reliable only if we see a daily close inside the channel coupled with the daily
indicators generating their sell signals.
Should we see such price action, we’ll consider opening short positions.
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Thank you.
Nadia Simmons
Forex & Oil Trading Strategist
Sunshine Profits - Effective Investments through Diligence and Care
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All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.