AUD/USD Trading in a Possible Double Bottom off Key Support

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AUD/USD Trading in a Possible Double Bottom off Key Support

AUD/USD has been trading sideways since early April. This week, price fell within a consolidation mode to a support level around 0.9210, seen going back to the end of March as you can see in the 4H chart.

AUD/USD 4H
audusd 4h chart

Double Bottom:
There is a double bottom forming as we get into the 5/23 session since AUD/USD is showing respect again at the 0.9212 level.

There is a double bottom scenario. A break above 0.9275 would complete the double bottom. This would reflect a market that is staying in the consolidation mode, which opens up the 0.9313 pivot, and then the 0.9375-0.94 resistance area.

audusd daily chart

Bullish Mode:
As you can see on the daily chart, the prevailing trend has been bullish before April, so there is another reason to be more confident of the bullish mode if AUD/USD does break above 0.9275.

Bearish Scenario:
If AUD/USD however holds below 0.93, and then falls below 0.92, the pair has the 0.9130-40 pivot area as the short-term target. Below 0.9130, the AUD/USD might open up a bearish outlook in the medium term with downside toward
1) 0.9060 (50% retracement)
2) 0.8965 (61.8% retracement)
3) 0.8885 ( support resistance pivot)

For now, let’s focus on 0.9275 and the 0.92 handle for direction in the short-term.

To contact the reporter of this story, email Fan Yang at fan@forexminute.com

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.