AUDUSD Is Bearish Against 0.7060 Resistance

02 July 2020

AUDUSD remains vulnerable for a sharp bearish reversal towards 0.6500 and further. The currency has been drifting sideways into a triangle consolidation since last several trading sessions and might just have terminated around 0.6940 yesterday. Looking lower from here

AUDUSD had managed to rally from 0.5505 lows in March 2020, through 0.7060 highs recently. Bulls remained in total control, carving a series of higher lows and higher highs until the 0.7060 levels. Since then, the currency has dropped through 0.6776 levels before going sideways.

Let us have a look at probable wave counts since 0.7060 highs. The drop from 0.7060 through 0.6776 was sub divided into 5 ways labelled as lower degree waves I, ii, iii, iv and v on the chart. The termination could be labelled as Wave 1 or A.

Since then AUDUSD has drifted sideways, unfolding as a potential triangle. A triangle unfolds into 5 waves, with each wave sub dividing into 3 waves. The potential waves has been labelled as a-b-c-d-e on the chart here. If the above counts are correct, AUDUSD has terminated the triangle consolidation around 0.6940 yesterday, also Wave 2 or B.

Alternately, AUDUSD may unfold Wave 2 as a flat and re-test 0.6980 levels before reversing lower again. Either way, bears should remain poised to resume lower again from current levels or from 0.6980 levels, going further.

Also note that Wave 2 or B has reached just above fibonacci 0.618 retracement around 0.6953 levels. Most traders might be preparing to go short again from 0.6930 or 0.6950/60, with risk above 0.7060 and projected targets towards 0.6500 at least.

Prepared by
Technical Analysis Team

Disclaimer: This information has been produced by a third party, for general information purposes only, and is not indicative of future results. Abans Global takes no responsibility for its accuracy or completeness. Any opinions expressed do not reflect those of Abans Global. This information does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should seek independent advice before making investment decisions. Reproduction of this information, in whole or in part, is not permitted. Please note: If you are a Professional client, you are not eligible for negative balance protection and you could lose more than your initial deposit.

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