Breaking Above the Upward Pressure Is Only a Matter of Time

Summary:

The AUDUSD has retreated today; momentum indicators are mixed and stochastics could be signaling bearishness, but the uptrend remains intact.

BUY AUDUSD

Close Time

CLOSED

0.65849

Entry Price

1.68090

0.64400

0.70593 -0.00234 -0.33%

9.2

Pips

Profit

0.64400

0.65941

Exit Price

0.65849

Entry Price

1.68090

Fundamentals

Although the AUDUSD fell today, the market continues to react positively to recent data from Australia, especially the popular inflation data for April. Additionally, while the Federal Reserve is not expected to ease policy before the November presidential election, the Reserve Bank of Australia (RBA) is seen as the most hawkish central bank; therefore, the upward momentum of the AUDUSD remains intact. The AUDUSD is currently struggling against the uptrend line from October 26, 2023, and breaking through this trendline is only a matter of time.

After today's pullback, the momentum indicators for the AUDUSD are mixed. Specifically, the Average Directional Index (ADX) remains below the threshold of 25, indicating a lack of clear direction in the market, while the Relative Strength Index temporarily crossed above the 50 midpoint. The stochastic oscillator is attempting to fall below its SMA, setting direction for another low and potentially serving as a springboard for a larger uptrend.

Breaking Above the Upward Pressure Is Only a Matter of Time_1

Technical Analysis

The AUDUSD rose on Monday, marking the third consecutive day of gains; however, it faced strong resistance before testing the previous high of 0.6714 and retreated.

The new strength further improves the short-term outlook. However, we believe that breaking through the key resistance levels will require some lower base for positive momentum to build. This suggests that the current pullback is a healthy correction; otherwise, a direct upward movement of the bulls may indicate exhaustion of bullish momentum.

Overall, the upward trend of the AUDUSD remains intact, and further gains are just a matter of time. On the upside, stabilizing at 0.6713 would restore the entire upward momentum from 0.6361 to 0.6870 resistance levels. However, a sustained drop below 0.6578 would dampen this bullish view, leading to a further decline towards the 61.8% retracement level at 0.6495.

Trading Recommendations

Trading Direction: Long

Entry Price: 0.6585

Target Price: 0.6809

Stop Loss: 0.6440

Deadline: 2024-06 - 19 23:55:00

Support: 0.6642, 0.6626, 0.6590, 0.6558

Resistance: 0.6680, 0.6714, 0.6743, 0.6761

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