AUDUSD Harmonic Analysis: Possible 400 pip sell-off imminent


Early this month, the Australian Dollar was one of the better performers among the majors. From low to the high, the AUD  gained 250 pips over the USD in June. The AUD has also gained 285 pips against the CHF and 590 pips over the EURO. AUDUSD has however carved a couple of bearish candles suggesting a possible decline. AUDUSD Harmonic Analysis also points to a possible 400 pip sell-off to 0.7100.

22 June, AtoZForexThe AUDUSD has so far peaked at 0.7634 this month. Since then tired bulls have been unable to push price towards the 0.7750 key resistance level. This week has seen price drop 80 pips from the June highs to 0.7550.

AUDUSD Harmonic Analysis: Sell-off expected below 0.75

AUDUSD Harmonic Analysis AUDUSD Harmonic Analysis D1 Chart (click to zoom)

The Daily chart shows an already completed bearish bat harmonic pattern. This pattern begun forming on March 21 at the 2017 high of 0.7744. The point A formed after a 415 pip decline on May 11. From there there was a 187 pip rally to form point B on May 23. Point C was formed on June 2 following the 150 pip drop back to 0.7368. The Potential Reversal Zone, point D was formed last week at 0.7634.

AUDUSD Harmonic Analysis: Where next from here?

A potential dip is imminent below 0.7500. If price manages to close below the 0.75 handle, we may likely see a 400 pip decline beck to the 0.7100 level, (December 2016 low). The AUDUSD remains in a downtrend on the bigger picture.

The down trend is clear on the Monthly chart. Over the past 24 months, the AUDUSD, much like the other USD denominated pairs have been ranging within a consolidation.

AUDUSD Harmonic Analysis AUDUSD Harmonic Analysis D1 Chart (click to zoom)

On a shorter term, a short trade could be opened towards the rising trend line support at 0.7400. If the rising trend line is broken, the next target could be 0.7180.

AUDUSD Harmonic Analysis AUDUSD Harmonic Analysis M Chart (click to zoom)

As stated above, the Monthly chart paints a much bleaker picture on the AUD should those support levels get broken. If we get a break of the symmetrical triangle, price could head towards the 2008 lows at 0.61, 1,400 pips below current price level.

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