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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)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX