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AUD USD – broke Fibonacci “0” – keep holding for FX:AUDUSD by LupaCapital

Hello Traders and Analysts,

Breakdown:

1. Note

2. Contents

3. Research breakdown

4. Education recap

5. Information on Lupa.

A Note before reading – this is a forecast analysis – based upon our trading strategy. This is tagged long, due to purchasing further increments upon imbalances.

Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities.

Master Key for zones

  • Red = Three Month
  • Blue = Monthly
  • Purple = weekly
  • Scarlet – Four day
  • Orange = Daily
  • Green = 8 Hour
  • Grey = 4hour
  • Pink = 1 hour

Previous analysis:
link here:

See the previous work

AUD USD, USD CAD

The Aussie has now passed 0.76 hurdle first, using a a daily Fibonacci on the daily chart , the price levels of this very strong strength from the Australian Dollar, the Fibonacci retracement of 0.382% is a strong possibility which has now been proved as price action here tapped 0.772 zone and consolidated while still making higher lows – giving confidence of confluence here rising to the monthly imbalance.

The next Hurdle is 0.80 which is our target for the next 3-5 months. The plan since the original analysis, price has been bullish and driving towards the 0.80 mark as expected. beating the analysis prediction at an early scenario by 1 week.

Monthly imbalances

Price has rejected the previous yearly lows of AUD USD at 0.55 to a $1.00

This zone is a powerful buying zone for positional holders like us for two reasons;

1. – Price is clearly making lower highs

2. – The wicks are closing bullish – suggesting the zone is a fractal buying imbalance for buyers.

Weekly time frame Imbalances

The weekly imbalances are shown and provide a clear indicator where 0.80 was a great opportunity with a key wick where price closed at the same price.

The weekly imbalances once the short has initiated shows the lows to monitor at the next imbalance where price will offer two key scenarios;

1. – The probability of the rally, base, rally continuation .

2. – The probability of a rally, bounce, rally where price will offer an opportunity to sell again.

Fibonacci
Weekly and Daily Fibonacci levels.

Weekly Fibonacci level using the high to the low – the retrace shows the opportunity at 0.618 or 61.8% – this also aligns next to the monthly “edge” however, looking left the wick highs failed to close inside 0.785XX, which means the rejection upon this level provides a perfect opportunity for a second sell position for a positional or weekly swing sell.

Daily Fibonacci
The Daily Fibonacci provided a double top or a 50% retracement rejection. For the shorter term sellers adding a position here would suffice, but recommend placing a larger position on the 61.8% as mentioned.
The edge of the monthly imbalance, has key closes which come down to a daily level with fractal pivot points . Notice how price will revert to test the zone price has come from. But creating the formation of a lower high.

SPX vs AUDUSD
The correlation of the SPX and the Aussie is a positive correlation when the SPX is bullish , this allows the AUD USD to remain bullish . With respect for USD purposes where the SPX becomes bearish from an imbalance or has a trend breather, the correlation becomes a sell imbalance for the SPX and AUD based upon the USD having the fundamental safe haven positional stance for investors.

Yields:
Using Yields and the Volatility index to provide further evidence.
Be aware of the Yields of the US05 – US20 Year, this can impact the SPX growth and AUD Bullish correlation.

DXY criteria:
DXY to see the imbalance reverse upon the devaluation of the USD where the FED has created an abundance of credit which has financed the citizens essentially to ‘stay put’ in cases whereby specific industry sectors within the US are rendered ‘useless’ until the hospitality and entertainment, aviation can all be kick started again.

Below are the pivotal monthly imbalances on the chart which are hard to not notice. The Monthly imbalances clearly indicate where the profit targets for the DXY are as price has clearly rejected.

Use this monthly imbalance analysis to help trade in a higher time frame.

Correlation:
Correlation of GBP AUD vs AUD USD
Imbalance spotting is important to note on one pair like GBP AUD, however the web behind the imbalance is just as important to keep in mind when looking for imbalance trades as pairs are called pairs for a reason.
Looking into two variables where correlation is either Perfect positive correlation +1, 0 or Perfect negative correlation -1 i in simple Lehman’s terms.

AUD is coming from a monthly imbalance meanwhile GBP AUD will turn positive where price is coming from a monthly buy imbalance.

Comparing the GBP AUD to the AUD USD – using a monthly correlation grid.
The current at time of analysing is -79.7% negatively correlated. This has been due to the weak USD in play and the positive correlation against the SPX500 and the USD associated with the index. XAU is also a factor here whereby XAU a hedge against inflation and a propulsion for the Aussie to provide further additional strength.

Here is the graphical scale below:

Where by the inverse of the AUD from 0.80 and a low of GBP AUD to 1.768XX, the opportunity arises for short positions and respective longs for the GBP.

See the GBP AUD chart here for further updates.

Gold production as the Aussie is a commodity currency.
Gold discounted offering
See here for the imbalances on Gold . This can help adjust the situation upon the USD.
Why is gold falling? Well simply put volatile situations where the return of XAU maintains no yield, the Dollar however does Yield through interest rates.
Gold will look to fall to level of around $1500 before examining next where the price is to move next. However pay attention to the 1700* whereby price has a good wick where price can closed out and may have an alternate buy opportunity here.

4 hour view – potential bearish continuation?
Here we have a clear imbalance filled where price has touched the low and successfully rejecting as price closed out – confirming the imbalance.
Now price has continued to sell off – looking for a low of the Fibonacci ‘0” to be tested. From here price will look to continue and break the zone at the low structural four hour zone.

Do you enjoy the setups?
Professional analyst with 5+ years experience
Focus on technical output not fundamentals
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Thanks,

LVPA MMXXI

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