AUD/USD has been bullish since making a low on the year at 0.7533 in April. Last week, it stalled at 0.8163 and retreated. Let’s take a look at the charts.
The 4H chart shows a persistent bullish market in a bearish correction. Note that the 200-, 100-, and 50-period simple moving averages (SMAs) are sloping up and in bullish alignment. So far price is above all of them, which reflects strong bullish bias. The RSI has held above 40 after tagging above 70, which reflects persistent bullish momentum.
As we begin the week, AUD/USD is about to test key support in the 0.7950-0.80 area. At 0.80, price is testing the 50-period SMA. Then, around 0.7950, we have a rising trendline and the 100-period SMA. If this area holds, AUD/USD still has upside risk towards the 0.8295-0.83 resistance pivot, near the 200-day SMA.
A break below 0.7950 with the 4H RSI falling below 40 would open up the 0.78 handle with risk of continuing the prevailing downtrend to threaten the 0.7533-0.7553 lows on the year.
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