The forex market has been keeping AUD/USD above the 0.92 handle. The 4H chart shows that there was common support around 0.9205, and price action respected this support again during the 5/29 European session.
Observations, Bulliish Scenario:
As we get started with the US session, price has formed a bottom and broken above a falling trendline.
The 0.9310-0.9320 area has been a common support/resistance pivot, and is a key level to break if the Aussie is to revive a bullish outlook.
The RSI is pushing above 60 which represents loss of bearish momentum in the 4H chart. Ability to tag 70 as well as stay above 40 upon subsequent pullback, would reflect bullish momentum.
If price can break 0.9320 and hold above 0.9250 upon subsequent pullback, the bullish outlook is in play. This opens up the 0.94-0.9409 resistance, then the 0.9460 high on the year.
If price fails to push above 0.9320, or even if it does and immediately fades below 0.9250, then the focus remains on the 0.92 support area. Below 0.92, AUD/USD turns from neutral to bearish. However, price will likely have to clear below 0.91 before it looks bearish on the daily chart.
When you look at the daily chart, you see a bullish AUD/USD that has been consolidating since April. the rising trendline may have been broken, but price remains bullish as it holds above the 200 and 100 – day moving averages..
Also the RSI has been turning up from 40. After tagging 70 earlier in the year, the RSI action reflects development of bullish momentum.
Today’s price action is a sign that the prevailing bullish bias remains, so watch for the 0.9320 level and the 0.9250 level for more confirmation of the bullish outlook.
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Earlier: WTI Crude – Price Reversal at Triangle Resistance