- The AUD/USD pair held on to its positive tone through the early European session on Wednesday, with bulls still awaiting a sustained break through the key 0.70 psychological mark.
- The mentioned handle coincides with a four-week-old descending trend-line, which if cleared will mark a near-term bullish breakout and set the stage for a further near-term positive move.
This is closely followed by 50% Fibonacci retracement level of the 0.7207-0.6831 recent bearish trajectory, around the 0.7020 region – also marks monthly tops, above which the pair seems all set to aim towards challenging the 0.7060 supply zone.
Meanwhile, technical indicators on the daily chart have just started gaining positive traction and reinforce the constructive set-up, though slightly overbought conditions on the 4-hourly chart seemed to be the only factor capping any further up-move.
Hence, it would be prudent to wait for a convincing break through the mentioned barriers before confirming that the pair might have already bottomed out in the near-term and traders start positioning for any further appreciating move.
On the flip side, rejection slide from the current resistance zone now seems to find immediate support near the 0.6960-50 region, which if broken might negate the bullish outlook and prompt some aggressive selling in the near-term.
Below the said support, the pair is likely to accelerate the slide back towards testing the 0.6900 handle before eventually dropping to its next major support near the 0.6865-60 area en-route multi-month lows, around the 0.6830 region.
AUD/USD daily chart
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