Written on 28/04/2020 by Theunis Kruger, FX Trainer at FXTM
The price of AUDUSD, on the D1 time-frame, was in a prolonged downtrend until March the 19th when a lower bottom was recorded at 0.55073. The resultant attractive price caught traders’ attention and buyers started aggressively entering the market with long positions.
After the bottom was reached at 0.55073, a possible price reversal was confirmed when the market pushed through the 15 and 34 Simple Moving Averages and the Momentum Oscillator broke the zero baseline into bullish territory.
The reversal was further supported by a higher bottom and a new bullish impulse wave that formed during the upward market advances.
A possible critical resistance level formed when a top was recorded on April the 14th at 0.64443. Sellers capitalised on this and tried to push the market lower. However, after forming another higher bottom on April the 21st at 0.62532, buyers again overcame the negative sentiment and demand caused the price to rush upwards.
On April the 27th, the AUDUSD pair broke through the critical resistance level at 0.64443, and three possible price targets were calculated from there. Applying the Fibonacci tool to the top of the resistance level at 0.64443 and dragging it to the higher bottom at 0.62532, the following targets were considered. The first target is estimated at 0.65624 (161 %). The second price target is calculated at 0.67535 (261.8%), and the third and final target is projected at 0.70627 (423.6%).
If the 0.62532 support level is broken, the anticipated price targets are annulled.
As long as the price continues making higher tops and bottoms, thus confirming that an uptrend is in place and demand is overcoming supply, the outlook for AUDUSD pair on the Daily time-frame will remain bullish.
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