AUD/USD H4 – Supply might be on the increase

The AUD/USD currency pair, on the H4 time-frame, was in a sideways movement until 5th of November when a higher top was recorded at 0.69280. Supply overwhelmed demand and the sideways move was negated.

After the high at 0.69280, the price broke through the 15 and 34 Simple Moving Averages, the Momentum Oscillator broke through the zero baseline into negative terrain and there was a crossing of the 15 and 34 Simple Moving Averages, called a Death Cross. This confirmed a possible technical price reversal or early stages of a possible new trend.

A likely critical support level formed when a lower bottom was recorded at 0.68614 on the 7th of November. Buyers tried to push the market higher but a possible resistance level formed later on the same day at 0.69135 which could not be breached and more sellers entered the market.

If the AUD/USD breaks through the critical support level at 0.68614, then three possible price targets may be projected from there. Attaching the Fibonacci tool to the lower bottom at 0.68614 and dragging it to the possible resistance level at 0.69135, the following targets may be calculated. The first target can be anticipated at 0.68293 (161 %). The second price target can be predicted at 0.67772 (261.8%) and the third and final target may be expected at 0.66930 (423.6%).

If the resistance level at 0.69135 is broken, the scenario is invalidated and will need to be re-evaluated.
As long as sellers maintain a negative sentiment and supply overcomes demand, the outlook for the AUD/USD currency pair on the H4 time-frame will remain bearish.

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