Short AUD/USD, AUD/JPY: Q2 Top Trading Opportunities

Short AUD/USD, AUD/JPY: Q2 Top Trading Opportunities

AUD/USD expanded the V-shape retrieval from 2020 to briefly trade over the 0.8000 manage in February, but a head-and-shoulders formation seems to be taking shape to the first quarter end. With the Relative Strength Index (RSI) demonstrating a similar dynamic as the index establishes a downward trend throughout the first quarter of 2021, traders ought to be mindful.

It remains to be seen if the decrease from the February large (0.8007) will prove for a correction in the broader trend or a key reversal in market behavior. The 50-Week SMA (0.7220) proceeds to track a positive slope, but a break/close under the'neckline' approximately 0.7560 (50% growth ) into 0.7580 (61.8% growth ) on a weekly interval would bring the disadvantage targets on the radar. The wider outlook for AUD/USD may align with the quantified move to the head-and-shoulders pattern as long as the RSI keeps the bearish trend from earlier this season. If so, the exchange rate may continue to narrow the gap using the 50-Week SMA (0.7220) if it pushes under the prior resistance zone approximately 0.7370 (38.2% growth ) to 0.7390 (38.2% expansion).

AUD/JPY has also extended the V-shape recovery from 2020 amid the ongoing increase in global equity prices, with the RSI pushing above 70 for the first time since 2013 throughout the same period. The low interest environment may continue to prop up AUD/JPY as the 50-Week SMA (76.44) keeps a positive slope, but recent advancements in the RSI warn of a bigger correction in the exchange rate as it falls back under 70 to indicate that a textbook sell signal.

Subsequently, that the RSI may continue to show the bullish momentum abating in case it snaps the upward trend carried over from the last calendar year, using a close beneath the 82.40 (50% expansion) region. On a weekly timeframe, that attracts a Fibonacci stride around 79.40 (23.6% retracement) into 80.20 (38.2% expansion) on the radar. However, the decrease from the March high (85.45) may turn out to be a correction from the broader trend as opposed to a shift in AUD/JPY behaviour as major central banks rely in their emergency tools to achieve their policy targets. If that prove the situation, there is potential for former immunity regions to act as support on the progress in investor confidence.

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