Australian dollar buyers may be gearing up for action after a short downswing.
Think AUD/USD is ready to extend its weeks-long uptrend?
We’re taking a closer look at the 4-hour chart!
AUD/USD 4-hour Forex Chart by TradingView
Risk assets like the Australian dollar turned lower yesterday after a lack of fresh catalysts encouraged some traders to second-guess China’s latest monetary stimulus measures and price in their global growth concerns.
The U.S. dollar, on the other hand, had a good Wednesday despite a light U.S. data calendar. The Greenback pulled back some of its weekly losses ahead of Thursday’s FOMC member speeches and Friday’s U.S. core PCE price index report.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. Suppose you haven’t yet done your homework on the U.S. and Australian dollars, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Will the dollar extend its gains against the Aussie?
AUD/USD, which got rejected from the .6900 psychological handle, may be finding support from the .6825 previous resistance levels. As you can see, the broken resistance zone lines up with the 38.2% Fibonacci retracement levels and is not too far from the 4-hour chart’s Pivot Point (.6780) line.
More importantly, AUD/USD is hanging out near a trend line support that’s been around since the second week of September.
Look out for sustained trading above .6850, which could set AUD/USD up for a retest of the .6900 previous highs. And, if fundamentals provide a bullish momentum for AUD, we could see AUD/USD make new monthly highs near .7000.
Further bearish moves aren’t off the table, however.
Sustained trading below the trend line and the .6800 support zone could lead to AUD/USD dropping to lower inflection points. In this case, we’re eyeing a potential drop to the .6725 – .6750 levels near the S1 (.6721) Pivot Point and the 100 and 200 SMAs.
Don’t forget to practice proper risk management and stay aware of top-tier market catalysts when trading this one. Good luck and good trading, errbody!
