The AUD/USD is bullish but traders took a stab at a reversal attempt that has not been confirmed nor invalidated yet.
Since retreating from the 0.9504 high on the year AUD/USD has dipped to about 0.9325, breaking below a rising trendline coming up from around 0.9210. I noted then that the AUD/USD still looked bullish despite the broken trendline. I noted that if the AUD/USD can hold above 0.94, the bullish outlook would be revived. It is current sticking around this level, probably waiting for after the release of the FOMC minutes due 2:30PM ET, 7:30PM GMT.
A bullish market will not be in the clear until a nice break above the common resistance levels around 0.9440.
On the other hand, the bearish outlook remains in play if price ends up south of 0.94 after today’s FOMC event risk. If the 4H RSI holds below 60, it would more evidence that bearish momentum is developing. In this scenario, the 0.9320-0.9330 area will be the first key support level. Below that the next key support will be in the 0.92-0.9210 area.
The AUD/USD daily chart shows a market that is bullish in 2014 after finding support at 0.8660 at the end of January. The tag of 0.95 made fresh highs on the year, and price is still holding above the 200-, 100-, and 50- simple moving averages. Sure the rising trendline is cracked, but that only reflects slowing of the uptrend.
If price does indeed push above 0.9440, the 0.95 high on the year is likely going to be under pressure, and traders will have the 0.97 highs from Oct. 2013 in sight. More technical clues such as reinforcement of 0.94 as support can convince traders to continue buying up the Aussie-US Dollar toward that 0.97 level.
Even if price fails to continue the uptrend this week and falls below that 0.9320 support, AUD/USD is still bullish. It would be in a neutral-bullish mode, meaning it would be in consolidation with a bullish bias. A break below 0.92 however could shift the pair into a bearish market.
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