Autochartist Forecast

The 30 minute AUD/USD has transitioned into a distribution market cycle. This environment is perfect for range bound formations such as flags, triangles or rectangles.  Flags are interesting formations: typically they are reversal chart patterns travelling in the opposite direction of the breakout.  A bull flag travels lower within a short wide channel but typically a break higher through the resistance of the downtrend line is expected.  Flags can continue off course and follow the range of the formation depending on the strength of the current trend.

The Reversal Flag formation on the 30 minute AUD/USD is a downward flag since it points lower, meaning a bullish signal.  The resistance (R) of the downtrend line is holding prices within the formation and is the decision level.

Watch for a breakout through this level to trade higher up between the past high at 0.9218 and the psychological level of 0.9200 (P).  The Initial Trend reading (IT) is high indicating that a trend is likely to continue but with prices testing the top of the formation a reversal is very close to being triggered.

For further information on this and other chart patterns visit www.autochartist.com