The Pullback Is Almost over in AUD/USD

AUD/USD has been trading on a downtrend for about 6-7 weeks. Last week was bullish though and this forex pair climbed about 100 pips.n


AUD/USD has been trading on a downtrend for about 6-7 weeks. Last week was bullish though and this forex pair climbed about 100 pips from the bottom, but the downtrend remains in place nonetheless.

As you can see from the daily chart below the trend line has been broken today. That ascending trend line started at the end of January, but today the price has moved above it. So, the trend line has been broken but the trend still remains bearish.

 

 

The 50 SMA (yellow) is a defence line for sellers

Trends always unfold in waves. In a downtrend, we have one bearish move lower followed by a smaller retracement higher. Right now, this forex pair is on a retracement period which started last week. But, the retrace higher seems to be coming to an end.

The stochastic indicator is almost overbought which means that the pullback up is almost complete. The same scenario happened in the middle of February. AUD/USD retraced higher until stochastic became overbought and then the downtrend resumed again. We’re in the same situation now, so the downtrend should resume soon, according to this chart setup.

We are already short on this forex pair with a long term forex signal, but we might play the downside again with short term signals today. Get ready for a short term sell signal here.

ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

Related Articles

Comments

0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

HFM

Doo Prime

XM

Best Forex Brokers