A Head and shoulders pattern has developed on the 4H chart and makes a good immediate short entry under trend resistance on the H1. Lets first take a look at the higher time frames.
The weekly chart price has respected the trend resistance and has consistently been heavily rejected. The rejection started with a pin bar in April followed by a tweezer top in July and August. Price has made another attempt in September resulting in another top pin bar. Last month we see an engulfing candle with a final attempt but failed to reach the trend line.
Price still range bound in the Symmetrical Triangle.
Technically the Aussie is still in a daily uptrend but has been rounding off and looking out of steam. Until price moves below .74200 we are still in an uptrend as must respect that. Near term trend is undermined until we either get a higher top or a lower bottom. If we get closer to the .74200 handle and break below it could spell the end of the daily uptrend.
What we have on the 4H chart is an active head and shoulders pattern which is a short position to enter as of now. Price had broken out of the head and shoulders pattern on the 5th of October at .76100. The height of the neckline to the peak is around 130 pips and we should expect a drop down of 130 pips at .74930. Typically on a head and shoulders pattern the distance between the peak of the head and the neck line will be the distance of the target area from the break.
This is interesting because the TP zone is resting right on the up daily uptrend resistance and also a former support level of July August and September. Sl should be above right shoulder.
Price looks poised to meet up with the 200 SMA on the daily. This is something is has not done since May this year. The 200 EMA was seen in September.
This week will be a quite week on the news front we have US retail sales on Friday but other than that price will follow market sentiment and it looks to the downside.