AUD continues to remain bearish as S&P gives negative outlook forecast

Australia retains its AAA rating, but S&P has held a negative outlook mainly from risks to revenues posed by weak wages growth and inflation.

I continue to have a bearish stance with the AUDUSD pair. Let’s take a look from the 4-hour and 1-hour time-frames.

AUDUSD 4-Hour

Over on the 4-hour time-frame, we establish that this pair is in a down-trend. Most recently we can see that it successfully tested a potential support turned resistance zone at the 0.7445~ mark. This is a decently strong resistance since as soon as the price hit this zone, a bearish candle followed. However, this doesn’t appear to be as strong as I would’ve liked it since the 8 hours after that and now continuing on to the 9th hour, we see it consolidating. This is the first indication that price action is telling a different story.

AUDUSD 1-Hour

Over on the smaller 1-hour time-frame, we see that the the short-term horizon indicates an uptrend. The second resistance zone shows that it is weakening. The latest sell-off that moved away from this zone was a rather weak move, which is probably around 60% to 70% of the previous move. Over on the shorter time-frame, it remains rather bullish.

From a technical standpoint, I would keep all long entries to the short-term. In the long run, this pair still takes a bearish stance.

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