1

AUD/USD update

December 17, 2020

I am long on record as having a bullish bias on the AUD/USD; ever since it made a bullish breakout from a Descending Wedge back in Late June 2020. I have been asked to review the AUD/USD so this bullish bias needs to be understood within that context.

 

Early references to this bullish-reversal Descending Wedge and subsequent breakout can be found through the links found in a Tweet back on April 27th, in a post on June 2nd, in another post on June 9th and in a weekly market update from July 7th.

I will recap my view of the chart’s but the overall target of $0.90 remains. For all those who would like to scoff here, I remind you to look at how price action fared after the GFC and keep an open mind for a recovery post Covid.

 

AUD/USD monthly: the bullish-reversal Descending Wedge breakout triggered in June/July 2020. My target for the longer-term breakout move is the 61.8% Fibonacci region, up near $0.90. Note how the monthly ADX is only now staring to tick higher. For the skeptics: note how price action fared after 2007-2009 GFC period! I urge all traders to keep an open mind and trade what you see and not what you think!

 

 

AUD/USD weekly: bullish ADX momentum is building on the weekly time frame:

 

 

AUD/USD daily: the daily chart’s recent Bull Flag breakout is still in progress but has stalled under 0.76:

 

 

AUD/USD 4hr: this bullish run has extended for 7 weeks now so a pause or pullback would not surprise. Trends do not run in straight line unabated; they zig and zag. So, watch for any potential zag down to the 4hr chart’s 61.8% Fibonacci; near 0.72. Time frame for trading is very important here: traders using shorter time frame charts need to factor in for fluctuations as part of any overall bullish continuation move.

 

 

FXA monthly: for those who don’t want to trade Forex but are keen to trade the AUD move then consider the ETF: FXA. Make sure you do your own due diligence but this ETF can be traded like a stock and there are also Options available for those with experience in that field:

 

 

Final comments:

  • the longer-term bullish target for the AUD/USD is $0.90.
  • be prepared for any pullback to $0.72; even as part of any overall bullish continuation move.