The US dollar has maintained its strong momentum into the new week, following the release of the CPI and GDP data. This has created a headwind for the AUDUSD pair, limiting its upside potential. Currently, the market is awaiting the RBA meeting on Tuesday for further direction. Let’s delve deeper into the market for more insights.
Key Price Levels:
Resistance Levels: 0.6500, 0.6600, 0.6700
Support Levels: 0.6400, 0.6300, 0.6200
AUDUSD Shows Resilience
Despite the strong US dollar, the AUDUSD pair has shown some resilience. After hitting the support at the 0.6445 price level, the market staged an upward rebound. The pair is currently trading below all Moving Average (MA) lines.
However, today’s session has extended the minimal upside retracement seen on Friday. Nevertheless, the market remains subdued as the Stochastic Relative Strength Index continues its descent toward the oversold region. Technically, the market still has the potential for further downward correction.
Downward Forces Maintain Dominance in AUDUSD
Price action in the AUDUSD 4-hour market remains below all MA lines on the chart. The latest price candle is red and has a contracted body, indicating that downward forces actively restrict upside retracements. Additionally, the Stochastic RSI has already risen too high into the overbought region, suggesting that upside momentum may wane.
Furthermore, the minimal upside retracement seen in this market may soon fade due to hawkish comments from Fed officials and stronger-than-expected US economic data. Therefore, traders may consider a bearish outlook towards the 0.6400 and 0.6350 price levels. However, it’s essential to monitor relevant economic indicators and central bank announcements for potential shifts in market sentiment.
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