Forex Video Briefing (10/2) – AUD/USD’s Flag Pattern
In the 1H AUD/USD chart, we can see that in the past couple of sessions, price rallied from 0.8663 to 0.8816. Price has broken above the 100-, and 50-hour simple moving averages (SMAs), but is holding below the 200-hour SMA. The RSI has pushed above 70 to show nascent bullish momentum in this time-frame.
The market is essentially showing some signs of reversal, but failed to complete the signal as price held below the 200-hour SMA and is now falling below a rising trendline. We can also say that price is breaking down a flag pattern, which would suggest bearish continuation.
If price can dip below 0.8730, it would clear the 100-, and 50-hour SMA, which should revive the bearish bias. And if the 1H RSI falls below 40, the bullish momentum this week would be lost.
Below the 2014 low of 0.8660, the next support pivots seen in the weekly chart will be at 0.8677 (Jan. 2010-low), and 0.8066 (2010-low).