AUDUSD Analysis March 2015 (D,W.M)
Created on Sunday, 01 March 2015 02:17
Written by Austin Galt
The Aussie dollar has traded as expected since the last report. About time! So let’s see what’s expected going forward.
The yearly chart was covered in the recent article, Commodities Set To Plunge Below 2008 Lows, and we’ll cover the other time frames here beginning with the daily chart.
AUDUSD DAILY CHART
The recent rally looks to have once again been rejected at the downtrend line I have drawn. That probably means new lows are on the way.
The Stochastic indicator has just made a bearish crossover while the Moving Average Convergence Divergence (MACD) indicator looks to be threatening one.
The Parabolic Stop and Reverse (PSAR) indicator has a bullish bias but I suspect it is about to be busted. We’ll know shortly.
AUDUSD WEEKLY CHART
There is a “three strikes and you’re out” top in place which is accompanied by triple bullish divergences in the Relative Strength indicator (RSI) and Stochastic indicator. This has led to a rally that has been quite unremarkable. Therefore, I suspect there is one last low to come – four strikes. This would likely be accompanied by quadruple bullish divergences and that, in my humble opinion, would be very bullish and lead to a very remarkable rally!
The MACD has just made a bullish crossover. Nice.
The Bollinger Bands show price has left the lower band but the move up looks unconvincing and I think one last lash at the lower band will see in the final low.
AUDUSD MONTHLY CHART
The RSI is oversold territory and a rally surely beckons. The RSI reading was a new low so any rally now is likely to be a bear rally. Subsequent lows will probably setup bullish divergences.
The Stochastic indicator looks to be threatening a bullish crossover.
The MACD indicator shows has been trending down bearishly but the averages have started to diverge a bit so a rally now would certainly be no surprise here.
It is my expectation that a big bear rally is set to commence imminently. I think the rally will be not only remarkable but spectacular as well.
How high will this bear rally trade?
I have added Fibonacci retracement levels of the move down from October 2013 high to recent low. Now I only expect marginally lower which should not overly affect this analysis. I favour a move up to at least the 76.4% level, the oft forgotten and my favourite level, which stands at 92.53c.
Also, the 88.6% level at 95.13c has to be kept in mind and, interestingly, this level is right where price topped out in July 2014. I suspect price can make a bearish double top with the trend here.
I have added Bollinger Bands and I am looking for the top to get close to the upper band which should come down from current levels as price trades up.
I am aware these price targets may sound outrageous but I just have a bee in my bonnet about more work being needed up at those levels. Of course we will have to monitor the price behaviour on the way up, but unless there are clear signs of a turn before these targets are reached, then that will remain my multi month target.
After that, it will be time for the bulls to run and hide as I expect a comprehensive shellacking in price.