Time to update you about the AUDUSD as the recent price movements are in line with our expectations, so time for the new targets! You should not be surprised that we were right though. If you follow us long enough, you probably noticed that around 80% of our analysis end up with profits. Anyway, lets take a look at our previous piece about the AUDUSD:
“Anyway, we all know that gaps like to be closed. AUDUSD closed the gap today so its all good, apart from the fact that it seems that the bearish momentum is high and they do not really want to stop. Price is deeply penetrating the orange support, which may indicate that the gap is just a false breakout and we should expect a massive reversal. As for now, we are still OK but the price dropping below the right shoulder will be a legitimate signal to sell. „
That was written on the 5th of December and the high bearish momentum was a good hint here as the price closed the gap and did not reverse. The decline continued and the sell signal was triggered. In the meantime, the price create a triple top formation (red neckline). That formation alone is enough for the legitimate sell signal. In addition to this, we are now creating the H&S pattern (blue neckline), which can only strengthened the negative outlook. What is more, look at the recent daily candles. We have strong drops and moderate recoveries. That is showing us a healthy downtrend, so after every mild recovery, we should await for a stronger single drop. My view on this instrument is definitely negative.