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
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