Technical analysis of AUD / USD for November 03, 2020
The AUD/USD pair was trading around the area of 0.7060 – 0.7122 a week ago. Today, the level of 0.7095 represents a daily pivot point in the H1 time frame. The pair has already formed minor resistance at 0.7122 and the strong resistance is seen at the level of 0.7158 because it represents the double top at the same time frame.
So, major resistance is seen at 0.7158, while immediate support is found at 0.7095. This resistance (0.7158) has been rejected two times confirming the validity of a downtrend.
Please notice that this scenario will be invalidated if the price reverses above the wave two highs at the level of 0.7158. If the pair closes below the double top of 0.7158, the AUD/USD pair may resume it movement to 0.7076 to test the weekly support 1.
From this point, we expect the AUD/USD pair to move between the levels of 0.7076 and 0.7158.
Equally important, the RSI is still calling for a strong bearish market, because the Relative Strength Index on the one-hour chart is flirting with the 70 level – nearing overbought conditions.
However, the current price is also above the moving average 100. Momentum remains to the upside and the AUD/USD pair is trading above the 100 and 50 Simple Moving Averages. The AUD/USD pair has broken key resistance at the levels of 0.7122 and 0.7158, time to buy right now around the spot of 0.7122 and 0.7158.
Price has finally broken our descending resistance line triggering a strong bullish rise as expected from the are of 0.7122 and 0.7158. We look to buy on strength above 0.7122.
As a result, buy above the level of 0.7122 with targets at 0.7158 and 0.7195 in order to form a new top (last double top sets at 0.7158).
Nevertheless, stop loss should always be taken into account, accordingly, it will be of beneficial to set the stop loss below the last bearish wave at the level of 0.7056. But, we still expect the bullish trend for the upcoming sessions as long as the price is above the 0.7056 price.
If the AUD/USD pair is able to break out the first resistance at 0.7122, the market will rise further to 0.7158. The pair will probably go down because the uptrend is still strong. Consequently, the market is likely to show signs of a bullish trend. Hence, it will be good to buy above the level of 0.7122 with the first target at 0.7158 and further to 0.7195. Since there is nothing new in this market, it is not bearish yet.
Buy deals are recommended above the level of 0.7122 with the targets indicated above. Major support is already set at the point of 0.7056. The pair is likely to move upwards continuing the development of a bulish trend to the level of 0.7195.
The material has been provided by InstaForex Company – www.instaforex.com