After spending the last week in a prolonged upward trend, it appears that the AUD/USD pair may have finally hit a significant resistance line. Technical indicators are showing that the pair is likely to turn bearish in the near future, providing forex traders with an excellent opportunity to jump on this trend from the beginning.
We will be looking at the 8-hour AUD/USD chart provided by ForexYard . The technical indicators being examined are the Williams Percent Range, Relative Strength Index and Stochastic Slow.
1. The Williams Percent Range is currently approaching the 0 level, indicating that the pair is well into the overbought zone. Typically this is a sign that a downward correction is forthcoming.
2. The Relative Strength Index , currently just below the 80 line, has just crossed into overbought territory. This lends further evidence to our theory that a bearish move is likely to occur.
3. Finally, the Stochastic Slow has formed a bearish cross. With both indicator lines pointing downward, it appears that a downward correction may occur very shortly.