End-of-month flows and a lack of fresh catalysts helped push AUD/USD back up from its November lows.
We’ve spotted a potential resistance zone that might kickstart another downswing for the comdoll pair!
Here’s what we’re looking at in the 4-hour time frame:
AUD/USD 4-hour Forex Chart by TradingView
Major U.S. dollar counterparts like the Aussie got a breather this week as uncertainty over the Fed’s next rate cuts and end-of-month flows helped drag the Greenback lower.
Reserve Bank of Australia (RBA) Governor Bullock also went under the spotlight this week to say that core inflation remains too high to consider near-term interest rate cuts, which increased the demand for the Australian dollar.
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 has been in a downtrend since October, revisited its November lows near .6450 but also bounced back up to the .6500 psychological handle.
How high can AUD/USD fly before the bears step back in?
We’re taking a closer look at the .6550 handle, which isn’t too far from the R1 (.6545) Pivot Point line, the 4-hour chart’s 100 SMA, and a range resistance zone that’s been around all month.
Bearish candlesticks below .6550 could set AUD/USD up for another swing lower that may take the pair back to the .6500 mid-range zone if not the .6450 November lows.
On the other hand, bullish candlesticks and sustained trading above the resistance area could lead to a longer-term bullish reversal that may take AUD/USD to the .6650 area of interest or .6700 November highs.
Good luck and good trading this one, trader friends!