- AUD/USD bulls capped in numerous attempts to no avail.
- Bears lining up a high probability setup for a deep Fibonacci retracement.
AUD/USD is moving towards a bearish weekly close following last week’s colossal 5% advance from below the 0.71 level.
The following is a daily analysis that illustrates where the most probable trajectory is based on market structure and price action.
Daily chart
While the extended rally would usually be supported with prior support, looking left, the prospects of the downside outweigh the support level considering the cluster of daily upside failures as resistance.
This, therefore, opens prospects of a deeper retracement to beyond the 38.2% Fibonacci.
The next structure and Fibonacci confluence come in at the 61.8% Fibonacci all the way down at 0.7125.
4-hour setup
Noting that the price is below the structure and the 21-hour moving average, there is still some consolidation required below this level for the MACD to confirm a bearish environment.
Bears will be seeking a discount from the local resistance structure, which was prior support.
On a retest of the structure, bears can enter with a stop loss above the structure for a 1:3 risk to reward ration and high probability setup.
Share
