AUD/USD: Analysing a Wedge Within a Wedge
Multi-timeframe analysis is a powerful technique that provides context and clarity to price action analysis. Today, we examine the AUD/USD, which is forming a wedge pattern across two timeframes.
Daily Chart Insights
The AUD/USD daily chart reveals a month-long equilibrium. Following a rally from April lows, AUD/USD encountered resistance at the March highs, leading to a choppy sideways range. This range is forming a wedge pattern, with prices funnelled between lower swing highs and VWAP support anchored to the April lows.
AUD/USD Daily Candle Chart
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Weekly Chart Context
The weekly chart adds depth to our analysis. It shows a multi-year downtrend with the market funnelled between lower swing highs and higher swing lows, forming a larger wedge pattern.
AUD/USD Weekly Candle Chart
Past performance is not a reliable indicator of future results
Integrating Patterns for a Comprehensive View
By overlaying the daily and weekly charts, we see that the daily wedge pattern is forming near the top of the weekly wedge. This creates a ‘sell zone’ that combines price patterns across multiple timeframes. Swing traders could look for bearish reversal patterns, such as double tops, pin-bars, and engulfing candles, at this sell zone. This multi-timeframe approach enhances the precision of swing trading strategies.
AUD/USD Daily Candle Chart
Past performance is not a reliable indicator of future results
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