AUDUSD touching important Support on Daily Chart
The AUD/USD pair has experienced a notable decline of -7.82% in recent weeks, without any significant recoveries. This drop has brought the price to a key horizontal support area, aligning with the previously identified triple bottom level on the daily chart. Additionally, the price has tested an uptrend line that has provided support since mid-2022. The overlap of the horizontal support and the uptrend line creates a technically significant zone, indicating a potential slowdown in selling pressure.
Bullish Scenario
If the price breaks above the downtrend line, acting as dynamic resistance, it could signal a shift in market sentiment, allowing buyers to regain control. Fibonacci retracement levels would then serve as potential targets:
For confirmation of the bullish scenario, the price needs to stay above the dynamic resistance and begin forming higher highs and lows.
Bearish Scenario
Conversely, if the price falls below the horizontal support at 0.6400, it would create room for further declines, potentially invalidating the triple bottom pattern and indicating a continuation of the downtrend. In this case, the next significant support level would be around 0.6300, with chances of moving even lower.
Impact of US Employment Data
The upcoming US employment data, particularly the Nonfarm Payroll figures, could significantly influence the AUD/USD pair. Weaker-than-expected results may weaken the US dollar, benefiting the Australian dollar and increasing the likelihood of breaking the downtrend line. Conversely, strong US labor market data could exacerbate selling pressure, pushing AUD/USD lower.
Summary
The AUD/USD is at a pivotal juncture on the daily chart, with the convergence of horizontal support and an uptrend line suggesting a possible reversal. However, the market's direction will hinge on subsequent technical movements and, crucially, on US economic data that could shift the balance of power.
Disclaimer:
74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past performance is not necessarily indicative of future results. The value of investments may fall as well as rise and the investor may not get back the amount initially invested. This content is not intended for nor applicable to residents of the UK.
Bullish Scenario
If the price breaks above the downtrend line, acting as dynamic resistance, it could signal a shift in market sentiment, allowing buyers to regain control. Fibonacci retracement levels would then serve as potential targets:
- An entry point could be considered if a candle closes above the downtrend line on the daily chart.
- The first target may be near the 38.2% Fibonacci level at 0.6605 (approximately 110 pips).
- The second target could be around the 50.0% Fibonacci level at 0.6670 (about 170 pips).
- A stop loss might be placed just below the recent low at 0.6395 (around 100 pips).
For confirmation of the bullish scenario, the price needs to stay above the dynamic resistance and begin forming higher highs and lows.
Bearish Scenario
Conversely, if the price falls below the horizontal support at 0.6400, it would create room for further declines, potentially invalidating the triple bottom pattern and indicating a continuation of the downtrend. In this case, the next significant support level would be around 0.6300, with chances of moving even lower.
Impact of US Employment Data
The upcoming US employment data, particularly the Nonfarm Payroll figures, could significantly influence the AUD/USD pair. Weaker-than-expected results may weaken the US dollar, benefiting the Australian dollar and increasing the likelihood of breaking the downtrend line. Conversely, strong US labor market data could exacerbate selling pressure, pushing AUD/USD lower.
Summary
The AUD/USD is at a pivotal juncture on the daily chart, with the convergence of horizontal support and an uptrend line suggesting a possible reversal. However, the market's direction will hinge on subsequent technical movements and, crucially, on US economic data that could shift the balance of power.
Disclaimer:
74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past performance is not necessarily indicative of future results. The value of investments may fall as well as rise and the investor may not get back the amount initially invested. This content is not intended for nor applicable to residents of the UK.
Disclaimer
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