Hi Traders! AUDUSD technical analysis and short term forecast is here. We do our analysis on the MetaTrader4 platform (MT4). Some very interesting useful tips and hacks about the MT4 platform could be found here. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available! Let’s start our analysis from the highest timeframe which will be the H4 chart here.
AUDUSD H4(4 Hours) Chart Analysis – Bullish Trend Pattern, Bullish Convergence, Downtrend Line Breakout
On the H4 chart, the price which is moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently it looks like the correction has happened in the form of double wave down. Also, we have a bullish divergence that has formed between the first low that has formed at 0.68859 and the second low that has formed at 0.68695 based on the MACD indicator.. The price then moved higher and broke above the last high at 0.69894 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. In addition to this, we also had a breakout of the most recent downtrend line which we may consider as yet another evidence of bullish pressure. Currently it looks like a correction is happening and there are no signs opposing this bullish view. We may now move down to lower timeframe and look for evidences supporting this short term bullish view.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
AUDUSD H1(1 Hour) Chart Analysis – Bullish Divergence, Higher Highs, Two Strong Support Zones
On the H1 chart, the price which was moving lower has created a bullish divergence that has formed between the first low that has formed at 0.69159 and the second low that has formed at 0.68695 based on the MACD indicator. Also, we could see that the price then moved higher and has created higher highs based on the MACD indicator, which is a sign of gaining momentum towards the bullish side. Currently, it looks like a correction is happening, also we had two strong resistance zones that has formed and the price which was moving higher has broken above these zones and is holding above them. After the breakout these strong resistance zones are acting as two strong support zones for us. There are two possible scenarios from here, the price might move higher from the current zone or alternatively if it moves lower then the next area to look for bullish setups with bullish evidences would be the second strong support zone. Until both these strong support zones shown in the image below(marked in blue) holds my short term view remains bullish here and I expect the price to move higher further.
Technical Analysis & Forecast Summary
AUDUSD H4(4 Hours) Chart Analysis
- Bullish Trend Pattern, Bullish Convergence, Downtrend Line Breakout
AUDUSD H1(1 Hour) Chart Analysis
- Bullish Divergence, Higher Highs, Two Strong Support Zones
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short term buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
