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AUDUSD bear-flag on right side of H&S pattern
The broader trend is lower in AUDUSD, and on that looking for shorter-term bearish set-ups makes sense. Thus far, today’s session is turning out to be a strong rejection lower from near the trend-line dating back to the beginning of last year.
Today’s high could mark the peak of a right shoulder of a multi-week head-and-shoulders pattern. Looking more granular at the 4-hr chart, the right shoulder is also turning out to be a bear-flag, a price sequence worthy in its own right of executing on.
A break of the bear-flag will quickly have the neckline in focus along with lows running back to October. A drop through 7021 is seen as the last obstacle standing between AUD and a test of the January 2 flash-crash.
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AUDUSD Daily Chart (Downtrend, H&S formation)
AUDUSD 4-hr Chart (H&S, Bear-flag)
AUDNZD unable to rally above former support
Former support becomes new resistance, a simple rule of thumb in technical analysis. That is what we are seeing right now in AUDNZD. It traded a bit above former support (now resistance) on an intra-day basis, but as long as it holds on a closing basis then it will be considered a successful test. Barring a strong close, stops placed above the high of today (10488) should remain out of harm’s way. The target for AUDNZD as outlined from last week is the flash-crash low, then parity or worse.
AUDNZD Daily Chart (Staying below former support)
***Updates will be provided on these ideas and others in the trading/technical outlook webinars held on Tuesday and Friday. If you are looking for ideas and feedback on how to improve your overall approach to trading, join me on Thursday each week for the Becoming a Better Trader webinar series.
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
