Bulls dominated the AUDUSD market for most of the previous week. However, the market experienced some tightening on Friday when the US PCE and GDP data showed signs of improvement. As the new week begins, both sides appear well-prepared with data on the first day. Therefore, the market direction will likely be determined by the stronger fundamentals.
Key Price Levels:
Resistance Levels: 0.6950, 0.7000, 0.7050
Support Levels: 0.6850, 0.6800, 0.6750
AUDUSD Sees a Strong Contraction
The AUDUSD market moved upward for most of the week but experienced a shift in momentum on Friday, mainly due to the release of US data, which shifted sentiment toward the US dollar. This limited the AUDUSD’s upward correction, leading to a contraction in the session.
However, the last price candle remains green, indicating that traders ended the week on a profitable note. This sets a new tone for the coming week, with price action still above the middle limit of the Bollinger Bands (BB) indicator. The Stochastic Relative Strength Index (Stochastic RSI) lines have now dropped below the 80 mark, indicating that the market is more inclined to descend in the new week.
AUDUSD Begins a Downward Retracement
Price action in the AUDUSD 4-hour market has been descending for the second consecutive session. Nonetheless, price activity remains above the middle limit of the BB indicator. Meanwhile, volatility appears moderate, signaling that downward pressure may be gaining strength.
In line with this, the Stochastic RSI lines are nearing a bearish crossover just below the 80 level. This suggests that downward momentum may have gathered enough strength to push prices lower. For short-term bearish gains, traders can target 0.6878, while staying updated on emerging data and news.
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