Talking Points
- Weekly Chart Technical Analysis
- Short Term formation before Non-Farm Payroll
Weekly Chart
Price was trading within an uptrend that began mid-year 2020 and may still be in place, however, the trend acceleration pace slowed once the FED began raising Interest Rates in early 2022, and price action continued sideways failing to make new highs since then. Price found resistance multiple times near the RED Resistance line identified on the above weekly chart near level 98.00
The overall context of price action reflects a narrowing formation with a trendline resistance level (Red line) above level 98.00, a break and a close above the resistance line may open the way for price action, however if price action fails to break above the resistance, price action may resume within the narrowing formation.
Price continues to trade above its EMA9 and its monthly pivot of 95.95, a confluence of support represented by the annual pivot point and monthly S1 calculation near level 93.80.
A negative divergence between price action and tick volume was identified on the chart, and another negative divergence is also in place between price action and RSI, with price action making higher highs while indicators are making lower highs
4 – Hour Chart
An inverted complex Head and Shoulder formation can be seen in shorter time frames (4 hours) as traders continue speculating on FOMC interest rate cuts, theoretically, lower rates on USD should reflect positively on AUDJPY, however, how much of it is already discounted in price is the question.
Price action at the neckline can be monitored closely as we approach Non-Farm Payroll release time, a false breakout and a pattern failure are also a possibility, especially with the negative divergences seen on the weekly chart and its trendline resistance level. (Red line)
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Moheb Hanna
