H4
The Australian currency is advancing further against the US dollar and has set a new week’s high 1.0130 yesterday. However, there are a lot of resistance levels on the way to new highs. As a result, by the end of the trading session the market started to correct and declined to the 4-hour Rotation line (3).
Nevertheless, major sentiment on the market remains positive. The Ichimoku Cloud is still diverging up (1), thus supporting the market’s sentiment.
In the short term the bulls are in advance as well – the Tenkan-sen (3) is growing up angularly. However, the rupture with the Kijun-sen (4) is growing bigger and this might result in a deeper correction. This is indicated by the Chinkou Span located in the overbought zone.
H1
The union of the Tenkan-sen and the Kijun-sen provided support to the market yesterday during the Asian session, as expected. As a result, the price bounced off the 1.0050 level and formed a new local high.
However, today’s trading started with a decline and even a breakdown of the Kijun-sen (4). Besides, the Tenkan-sen and the Kijun-sen started to form a Dead cross (3, 4). This denotes that the correction might become continuous and in the nearest time we can expect the aussie to decline to the upper limit.
We should not also exclude the option of breaking down the Senkou Span A and trading inside the Cloud.