AUD/USD is turning lower after recent events pushed U.S. demand higher.
How low will the comdoll pair go before the bulls extend its multi-week uptrend?
The 4-hour time frame could give us clues:
AUD/USD 4-hour Forex Chart by TradingView
In case you missed it, an upbeat jobs report from the U.S. cooled down Fed rate cut expectations and lifted the U.S. dollar higher across the board.
That said, the Reserve Bank of Australia’s (RBA) relative lack of dovishness compared to its peers and China’s recent monetary and fiscal stimulus measures are keeping the Australian dollar supported among the “risk” currencies.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. and Australian dollars, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
AUD/USD, which found resistance at the .6940 levels, is showing more bearish candlesticks and may be headed for lower inflection points.
We’re eyeing the .6775 – .6825 area as a possible support as it lines up with a previous resistance zone. Notably, it’s also near the S1 (.6815) Pivot Point line, 100 and 200 SMAs, and the 38.2% and 50% Fibonacci retracement levels in the 4-hour time frame.
Will AUD/USD find enough buyers at the support zone?
Keep your eyes peeled for green candlesticks and consistent trading above the S1 and 50% Fib levels, which could help draw in enough buyers to push AUD/USD back to its October highs or even new monthly highs.
On the other hand, a sharper downswing or another leg lower could draw in more sellers. Look out for sustained trading below the SMAs, which may create a bearish momentum that could drag AUD/USD down to the .6700 psychological levels.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier market catalysts when trading this one. Good luck!