AUDUSD backtesting breaking point

As we were pointing out recently, AUDUSD was testing interesting trend lines, here is an updated version where we can see how the LT trend line(orange) rejected price and how IT trend line (white) was breached and then backtested confirming the ST-IT bearish case.

LT view



ST view:

Interesting trend lines for the Aussi

As you may have noticed already, we use AUDUSD quite frequently to assess risk appetite among investors which turn out to be a good proxy for stocks markets.

We are seeing some important LT trendlines tested last week. Decay in momentum also increase possibilities of a deep correction after an initial pop early next week.




If the ST trendline (dashed) is broken, we can expect a sizable correction next week since major trendline (black) has been backtested and failed.

A couple of ideas from currencies....

One of our favorite proxy for market (AUDUSD) has just filled its gap and reaching resistance levels. Notice also the rising wedge. Overall a nice bearish setup.

Maybe one of the most bullish FX main pair recently. Now ready for a retracement IMO.

You may recall this old post where we presented the RSI setup. It has worked very nicely ever since.