2016-10-19 12:11:57

Review and dynamics
Since the opening of today's trading day the pair AUD/USD has been traded in the narrow range at the level of 0.7665 after 5 -day growth, which followed after the rebound from support level of 0.7520 (ЕМА200, the lower limit of the ascending channel, the lower limit of the ascending triangle on the daily chart). It is expected that the rise in the pair AUD/USD will continue until it maintains position above the key support level of 0.7520.

The pair is also close to the level of 0.7700 in the top of the ascending narrowing triangle. The upper limit of this triangle is near resistance level of 0.7700.

Our opinion
Narrowing ascending triangle is a pattern, which shows continuation of the trend. Breakout of its upper limit at the level of 0.7700 may trigger further rise in the pair AUD/USD.

It is also necessary to pay attention to the range between the levels of 0.7445 (Fibonacci 23.6% after the decline from July 2014) and 0.7700 (highs of August, September and also the upper line of the descending channel on the weekly chart). The level 0.7700 is the key line for determining further movement in the pair.

In the case of breakout of the resistance level of 0.7820 (Fibonacci 38.2% and highs of April), the pair AUD/USD may go up to the levels of 0.7960 (ЕМА144 on the weekly chart) and 0.8130 (Fibonacci 50.0%) or 0.8200 (ЕМА200 on the weekly chart).

As an alternative scenario the pair can break down support levels of 0.7520 and 0.7445 (Fibonacci 23.6%). In this case, negative trend will continue and the pair AUD/USD may decline to the levels of 0.7325 and 0.7140 (lows of May).

This scenario will be feasible after break down of the support level of 0.7600 (ЕМА200, ЕМА144 on 4-hour chart, ЕМА50 on the daily chart). The indicators OsMA and Stochastic give mixed picture. However, on 4- hour chart the indicators give signals for short positions, showing that the decline will continue with the target of 0.7600.

Support levels: 0.7600, 0.7520, 0.7445, 0.7325, 0.7290, 0.7200 and 0.7140.
Resistance levels: 0.7700, 0.7820, 0.7900 and 0.7960.

Trading tips
Sell on the market. Stop-Loss: 0.7720. Take-Profit: 0.7600, 0.7520, 0.7500 and 0.7445.
Buy Stop: 0.7720. Stop-Loss: 0.7680. Take-Profit: 0.7800, 0.7820, 0.7900 and 0.7960.

At the top of the triangle
At the top of the triangle

Key levels are 0.7700 and 0.7520.
Key levels are 0.7700 and 0.7520.