AUD/USD: Technical Analysis Report 26 Jan 2021
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Following two spirited months of gains off demand at 0.7029/0.6664 (prior supply), early 2021, despite currently fading session peaks, shines light on a possible continuation higher to 0.8303/0.8082—a supply zone aligning closely with trendline resistance (prior support – 0.4776).
In terms of trend, the primary downtrend (since mid-2011) remains south until breaking 0.8135 (January high ).
Brought forward from previous analysis –
Recent developments show a bullish pennant pattern establishing a foothold, forming between the 2021 high at 0.7820 and January 4 low at 0.7642.
Technicians will also note the aforesaid pattern balances off support at 0.7647, with supply at 0.7937/0.7890 to perhaps make an arrival in the event a breakout higher develops.
Out of the RSI indicator, the value remains entrenched within an early descending channel. Support is seen at 52.00, while resistance is set around 80.19.
The daily timeframe’s bullish pennant pattern, according to the H4 chart’s technical framework, is developing between demand at 0.7665/0.7644 (prior supply) and resistance at 0.7805.
Outside areas to be conscious of are resistance at 0.7843 and demand at 0.7600/0.7625—an area of particular importance due to it being within this zone a decision was made to breach 0.7639 (December 17 high). Also seen intersecting with the demand is a 127.2% Fib projection at 0.7620.
0.77 received a blow on Monday, whipsawing to lows at 0.7682 and producing a hammer candle pattern. Buyers are in force, yet whether they contain enough fuel to retest 0.7228 resistance is difficult to estimate, especially as H4 demonstrates a clear(ish) path to demand at 0.7665/0.7644.
Another prominent characteristic on the H1 is demand at 0.7654/0.7672, seen fastened to the upper side of the aforesaid H4 demand.
H1 demand at 0.7654/0.7672, sitting on top of H4 demand at 0.7665/0.7644 (holds daily support at 0.7647 within), offers healthy confluence. Also adding value, of course, is the current uptrend and the monthly chart pictured seeking higher terrain.