AUD/USD has been bullish since making a low on the year at 0.7532. The 4H chart shows the bullish trend extending to 0.8163 about a month and a half later.
The 4H chart shows that this week, even though AUD/USD price has been retreating from 0.8162, it is still bullish. Price is still above the 200-, 100-, and 50-period simple moving averages, which are sloping up and in bullish alignment. Finally, the 4H RSI has held above 40 after pushing above 70, which reflects maintenance of the bullish momentum from at least the last week.
If price can hold above 0.80 and the 4H RSI above 40, we still have a pretty clear bullish trend. However, to the downside, a break below 0.7950 might be needed to open up a sideways one. Then, a break below the 0.7850 support pivot would be needed to open up a bearish continuation scenario. Inability to climb back above 0.80 would add to the bearish scenario.
Now, before we look down at these lower support levels, we should note that the 4H chart shows a bullish outside bar after AUD/USD tagged 0.80. This could lead to a bullish continuation swing. Let’s examine this possibility in the 1H chart.
In the 1h AUD/USD chart, we can see flag pattern developing. While the momentum is lost in the near-term (RSI fell below 40), price is still showing some bullish bias as it holds above the 200- and 100-hour SMAs. Now, a break above 0.8075 will clear both the flag resistance and the 50-hour SMA, which would open up the bullish continuation scenario.
In the bullish continuation scenario, AUD/USD has the 0.82-0.8215 support/resistance pivot in sight, then the 0.83 high on the year, near the 200-day SMA.
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