Following the recent gain in USD momentum, the AUDUSD was one of the currency pairs on the receiving end. This is because the rise in the momentum of the dollar created a headwind in its market. Consequently, this plunged the pair towards lower support levels. What can we anticipate now in the meantime as the dollar’s momentum cools?
Major Price Levels:
Resistance Levels: 0.6567, 0.6600, and 0.6650
Support Levels: 0.6517, 0.6500, and 0.6450
AUDUSD Bulls Gather Minimal Profits
As earlier mentioned, the cooling momentum of the USD has allowed trades in the AUDUSD daily market to gather some profit. Also, this is most likely to be the norm ahead of the arrival of meaningful economic data. Looking at the daily chart, it can be seen that price action bounced back above 0.6500 after poking through it as a support level.
At that point, the lines of the Stochastic Relative Strength Index (RSI) indicator are now trending slightly upwards following a crossover in the oversold zone. Nevertheless, the distance between these lines shows that the upside correction in price movements has been very minimal.
AUDUSD May Extend Consolidation Above Key Support
Extending the scope of this analysis to the AUDUSD 4-hour time frame, one can see that for a while price action seemed to have been consolidating above the Middle limit of the Bollinger Bands. However, the Bollinger Bands on this market appear to have contracted significantly but are still wide enough to accommodate moderate volatility. Consequently, this indicates that we may not anticipate a strong upswing in prices if one occurs.
Furthermore, the last price candle here is a bearish one and further pushes the price toward the support at the middle limit of the Bollinger Bands. Also, the Stochastic RSI indicator lines can be seen delivering a bearish crossover in the overbought region. Therefore, it seems likely that price action may correct towards the $0.6500 mark.
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