Yesterday I wrote about a big triangle, which appeared in the non-accidental place on the chart of AUD/USD. Glancing again today we see another triangle… just below the first. Will bears manage to push the exchange rate of AUD/USD down?
The large triangle has placed just below the level of 0.7700 – strong psychological resistance, which bulls on the AUD USD apparently failed to cope with. At the time of publication of yesterday’s analysis we were still waiting for a clear retest of broken formation from the bottom, hoping that such sell signal will lead to a deeper correction of recent increases.
Clearly, I overestimated the strength of yesterday bears as AUD/USD instead of creating new black candles the pair again consolidates. Again in a form of ascending triangle. Sell positions may have been concluded already yesterday evening, when on the chart appeared clear pinbars. Despite initial declines during the Asian session AUD/USD returned to the areas of opening the original position and began to consolidate. Actually we can only wait for stronger breakout from emerging consolidation. Strong declines we have witnessed yesterday morning increases the likelihood of a bear breakout from the triangle. This view seems to be shared by Citi analysts, who also recommend selling AUD/USD at market prices.
Therefore, the summary of yesterday’s analysis remains valid and I would expect declines in AUD/USD at least to the area of 0.7550.
