Australian dollar buyers may be preparing to take action after a short dip.
Do you think the AUD/USD pair is ready to extend its weeks-long uptrend?
We take a closer look at the 4-hour chart!
AUD/USD currency pair on 4-hour chart Chart by TradingView
Risk assets such as the Australian dollar fell yesterday after a lack of fresh stimulus prompted some traders to reconsider China’s recent monetary stimulus measures and assess their concerns about global growth.
On the other hand, the US dollar performed well on Wednesday despite weak US data. The US dollar recovered some of its weekly losses ahead of the FOMC speeches on Thursday and the US core PCE price index report on Friday.
Remember that directional biases and volatility in market prices are usually driven by fundamentals. Assuming you haven’t done your homework on the USD and AUD, it’s time to take a look at the economic calendar and stay up to date with the daily fundamental news!
Will the dollar continue its gains against the Australian dollar?
The AUD/USD pair, which rejected the psychological level of 0.6900, may find support at the previous resistance level of 0.6825. As you can see, the broken resistance area coincides with the 38.2% Fibonacci retracement level and is not far from the pivot point line (0.6780) on the 4-hour chart.
Most importantly, the AUD/USD pair is near the trend line support that has been in place since the second week of September.
Look for sustained trading above .6850, which could lead to a retest of the previous highs of .6900 in AUD/USD. If fundamentals provide bullish momentum for the AUD, we could see AUD/USD record fresh monthly highs near .7000.
However, further downward moves are not ruled out.
Continued trading below the trend line and the .6800 support area could lead the AUD/USD pair to lower inflection points. In this case, we target a potential decline to the .6725 – .6750 levels near the S1 pivot point (.6721) and the 100 and 200 simple moving averages.
Don’t forget to practice proper risk management and stay aware of top-notch market triggers when trading this product. Good luck and happy trading, bro!