Technical Bias: Bullish
Key Takeaways
- Aussie dollar traded higher against the US dollar yesterday, and broke an important resistance area.
- 0.9040-30 area might act as monster support in the near term for the AUDUSD pair.
- AUDUSD support seen at 0.9040 and resistance ahead at 0.9140.
The AUDUSD pair finally managed to gain bids intraday after trading as low as 0.8983. More gains are favored as long as the pair stays above the 0.9040 support area.
Technical Analysis
There was a major confluence resistance area around the 0.9030 level for the AUDUSD pair. Yesterday, the pair not only managed to break the resistance area, but also surged towards the 0.9100 area. Currently, the pair is trading around the 23.6% Fibonacci retracement level of the last fall from the 0.9404 high to 0.8983 low. So, there is a chance of a small pullback towards the 0.9050-40 area where the Australian dollar buyers might appear to protect the downside in the pair. The 4H RSI is still below the 50 mark and struggling to close above the mentioned mark. However, the 0.9040 level might act as a solid hurdle for sellers in the near term. If at all the Aussie dollar sellers manage to break the stated level, then a retest of the previous low might be on the cards.
On the upside, initial resistance can be seen around the 0.9100 level. However, if buyers take control, then a move towards the 38.2% fib retracement level is possible which also coincides with the 50 simple moving average (SMA) – 4H. In that situation, the 50% fib extension could act as a swing area for the pair moving ahead.
Overall, buying dips in the short term might be an option, but traders need not to get aggressive as the pair might blast lower if the sentiment shifts again.
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