AUDUSD Capitulation Low (D)
Created on Monday, 26 January 2015 01:56
Written by Austin Galt
Price has capitulated lower in recent days and I am looking for a low so perhaps this is it. Let’s check out the daily chart.
AUDUSD DAILY CHART
I have added two downtrend lines to the chart. The higher trend line shows the recent high just under 83c was rejected at this trend line.
This recent high looks like a wave 4 high which would imply the recent impulsive move down is the final wave 5 playing out.
Keep in mind price has nudged a little lower today down to around 78.6c before reversing back up. That may well be it.
The lower trend line is along some recent lows and it shows price has busted below this trend line. I suspect this is a false break with a reversal back up imminent, if it hasn’t begun already.
The Bollinger bands show the low traded well outside the lower band which is commonly found at lows.
The Relative Strength Indicator (RSI) is very oversold and showing bullish divergences at this low.
The Stochastic indicator is also showing multiple bullish divergences at this low.
The Moving Average Convergence Divergence (MACD) indicator is showing a big triple bullish divergence with the first low all the way back in October 2014. This is encouraging indeed for the bulls.
Summing up, I am looking for a big bear market rally to take place over the coming months and hence am looking for a solid low. Perhaps we finally have one in place now.