Wednesday, January 31, 2018

AUD/USD Is In A Strong Resistance Zone

On the weekly  time frame the pair is close to the resistance trend line of the flag that has been developing since 2016.

The pair has reached a strong resistance around 0.8124 – 0.8135. It tried to break out above in September 2017 but it was unsuccessful.

On the D1 time frame one can notice that the test of that resistance has lasted for several days and there is even a RSI divergence.

I think that a rally to the resistance trend line of the flag on the monthly time frame around 0.82 is possible, but if there is not breakout the pair will probably return within the consolidation and it will continue to develop the flag.  Obviously this is a key zone and we should follow closely the pair’s development in it.