During the previous week, the US dollar experienced a moderate recovery after economic data showed some strengthening. This resulted in a moderate price dip in the AUD/USD market. Currently, the market is on the brink of breaching the psychological support level at the 0.6700 threshold. Let’s take a closer look at the situation.
Key Price Levels:
Resistance Levels: 0.6750, 0.6800, 0.6850
Support Levels: 0.6700, 0.6650, 0.6600
AUD/USD May Be Holding on to Past Glory
Price action in the daily AUD/USD market remains above the 0.6700 threshold. The most recent price candle on the chart has brought the pair slightly downward, now trading below three green Guppy Multiple Moving Average (GMMA) curves. Meanwhile, the Stochastic Relative Strength Index (RSI) lines are still projected upwards, though they remain in the oversold region.
Considering the magnitude of the downward retracement, the reason for this is clear. The current price dip has wiped out less than 50% of the gains seen in the previous session. Presently, the market is anticipating an interest rate increase of less than 50 basis points (bps), which may help keep the US dollar afloat against the Australian dollar.
AUD/USD Bears Are Looking More Threatening
In the AUD/USD 4-hour market, downward forces appear to be gaining strength progressively. The most recent price candle on the chart is red, standing at the 0.6700 baseline. The pair now trades below six GMMA indicator lines. Additionally, the Stochastic RSI lines are plunging steeply toward the 50 level of the indicator.
Technically, this suggests that downward forces are poised to break through the support level at the 0.6700 mark. Combined with the possibility of a smaller Fed interest rate increase, downward forces are gaining momentum. As a result, this may drive the market toward the 0.6650 mark.
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