The Australian Dollar staged an impressive V-shaped recovery month with AUD/USD surging more than 9% off multi-year lows. The advance has now extended into confluent resistance at 6408/29- a region defined by the 50% retracement of the 2024 decline and the February swing high. Note that the upper parallel of the descending pitchfork converges on this threshold over the next few days and further highlights the technical significance of this zone- looking for a reaction off this mark.
Initial support rests with the August / April lows at 6348/62- a break / daily close below this threshold would threaten a larger setback towards the 38.2% retracement / monthly open at 6245/47 with key support steady at the 2022 low / 2025 yearly open at 6170/88 (an area of interest for possible downside exhaustion / price inflection IF reached). Losses below this threshold would mark resumption of the broader downtrend.
Ultimately, a topside breach / close above the 200-day moving average near ~6465 would be needed to validate a breakout of the October downtrend / suggest a larger trend reversal is underway. Subsequent resistance is eyed at the 61.8% retracement at 6550 and the November high-day close (HDC) at 6680.
Bottom line: A 9% rally off multi-year lows takes AUD/USD into multi-month downtrend resistance- risk for possible topside exhaustion / price inflection here. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops- losses should be limited to 6245 IF price is heading higher on this stretch with a close above the 200-day moving average need to fuel the next leg of the advance.
-MB
Initial support rests with the August / April lows at 6348/62- a break / daily close below this threshold would threaten a larger setback towards the 38.2% retracement / monthly open at 6245/47 with key support steady at the 2022 low / 2025 yearly open at 6170/88 (an area of interest for possible downside exhaustion / price inflection IF reached). Losses below this threshold would mark resumption of the broader downtrend.
Ultimately, a topside breach / close above the 200-day moving average near ~6465 would be needed to validate a breakout of the October downtrend / suggest a larger trend reversal is underway. Subsequent resistance is eyed at the 61.8% retracement at 6550 and the November high-day close (HDC) at 6680.
Bottom line: A 9% rally off multi-year lows takes AUD/USD into multi-month downtrend resistance- risk for possible topside exhaustion / price inflection here. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops- losses should be limited to 6245 IF price is heading higher on this stretch with a close above the 200-day moving average need to fuel the next leg of the advance.
-MB
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.