AUDUSD High Time Frame Analysis

12-Month

Starting with the 12-month time frame we can observe a leg up from 2001 to 2011 where price went from the lows of 0.47760 to the highs of 1.10802.

AUDUSD 12-month time frame

Since making our highs in 2011 momentum has changed and we have dropped to test 0.68910. In 2017 and 2018 we retraced to test 0.80656 before continuing our bearish trend.

The more likely progression is to now break this level and drop lower to 0.57260. Alternatively if we remain at this level and accumulate we can rally to test 0.93874. Lower time frames will provide more precision.

3-Month

AUDUSD 3-month time frame

On the 3-month time frame we can split the single up leg into two seperate legs. We can also add a more precise level at 0.67480 whose origin is the swing-high that made our all time low. We can see this level being respected by our last couple of candles and slowing our bearish momentum.

1-Month

Again more sub-dividing of legs and zooming into current price action.

AUDUSD 1-month time frame

Further detail can be observed around the last few candles, in particular how we respect 0.68910 and 0.67480. There are no obvious reversal patterns or signs of slowing bearish momentum, just a minor retracement due to levels being hit. On the monthly chart I expect price action to eventually break these current levels and head towards 0.57260.

Zooming in further we can identify our most recent monthly leg down marked in yellow, along with the swing-low of the high candle at 0.70167.

AUDUSD 1-month time frame zoomed

We can look for shorts around this level on lower time frames.

1-Week

A double bottom can be recognised as we respect 0.67480. This accumulation will target the first support lost which brought us down to the low. On the weekly chart this can be approximated to 0.69962 (which fits in nicely with our monthly level of 0.70167) followed by 0.71914 if we can reach that high.

AUDUSD 1-week time frame

The weekly chart also shows the origin of the level we are currently respecting of 0.69105. A swing-low to our high of 0.70821.

If price action moves above 0.70821 it is the first invalidation of our down-trend. This is therefore an appropriate level for a stop-loss.

1-Day

We now have lots of levels plotted and without following the above analysis things can get confusing. We must focus only on what is next. On the daily chart we can add another more precise level at 0.70374 whose origin is the low of the candle that made the high. This is the daily target following the accumulation at 0.67480.

AUDUSD 1-day time frame

A couple of things to note, one is the size of our accumulation pattern. This huge double bottom, together with the significance of the higher time frame level which it respected, suggests we may eventually break higher than 0.70821. This is important for setting our expectations when entering trades.

The second thing to note is how higher time frame levels are lining up with lower time frame levels from 0.69962 to 0.70374 area. This suggests we should get a nice reaction here. The invalidation level is close by so I will be looking to enter short trades.

For the moment we are looking bullish on the daily. I expect a retracement at our current level before ultimately progressing towards the 0.7 area.

Lower time frames can provide more precision and clues.

Leave a comment

Your email address will not be published. Required fields are marked *