AUDUSD Update April 2015 (W)
Created on Sunday, 05 April 2015 02:13
Written by Austin Galt
Since the last report, price has busted the double bottom support that stood at 75.91c. As outlined in the email update, this predictably saw price trade to new lows below 75.60c before price rallied on the back of an announcement about US jobs.
I view moves based on announcements as artificial and especially when an announcement causes price to move in the opposite direction of the prevailing trend that move generally proves temporary only. In this case, the announcement saw price rally and considering the overall trend is down then it should provide those inclined with a reasonable entry on the short side.
Let’s take a quick look using the weekly chart.
AUDUSD WEEKLY CHART
We can see the rally a couple of weeks ago just failed to bust resistance of the Parabolic Stop and Reverse (PSAR) indicator which pertains to the dots on the chart.
This rally was also at resistance from the middle Bollinger Band. Price subsequently turned back down and I am now looking for a move lower which potentially puts in a final low which is below the lower band. The lower band is currently around 74.70c.
The Relative Strength Indicator (RSI) and Stochastic indicator are both showing quadruple bullish divergences on the low set a few weeks ago at 75.60c. If the recent low last week were to hold then there would be a quintuple bullish divergence on both indicators but I doubt that scenario. Instead, I favour price continuing lower which sees these indicators go lower and see price accompanied by a new triple or quadruple bullish divergence.
Personally, I doubt this week’s high will be higher than last week’s high at 77.41c and I am now looking for a low most likely early next week and possibly as low as 74c. And I still expect a spectacular rally to follow.