Overview:- Earlier AUD/USD was doing so well and we have seen an unstoppable rally from 0.5500 to 0.7065 level. The stories of bull’s victory can be seen on the daily chart levels which is an incredible move from bull’s campaign. On the contrary, From Starting of this week pair remained depressed and seems like bulls have become tired now trying to handover the charge to the bears.
Well primary to the secondary trend is up so it’s not going to be an easy task for bears to take it a downside, because the current downfall may be a correction or profit book. The time will give the answer that whether we are right or wrong but the way bears have entered it seems like some downfall is on the cards, however we will get further confirmation below 0.6850 level.
From technical perspective we can see on 4 hourly chart initially we got a shooting start candlestick followed by a steep downfall till 0.6798 level and a short term rounding top pattern has been formed which is flashing further downside signals.
The MACD is also showing bearish crossover on the 4 hourly chart which is a recent development also, RSI turned down from the overbought territory which is favoring the bears for the short term. It’s an early sell call we will get clear confirmation below the 0.6850 level. An hourly closing below the 0.6850 level will open the way towards the 0.6600 level and 0.6400 at least. .
It is being weighed down by worsening US-China relations. Diplomatic tensions between the world’s two largest economies shifted the focus of investors and traders. The fresh buying will be seen above 0.7070 and that will open the way towards 0.7265 on weekly chart. The 0.7070 can be considered as key resistance level followed by 0.7150 where 0.6670 is a major support level followed by 0.6500 level.
Trade idea:- One can go for short below 0.6850 for the target of 0.6750 and 0.6600 with the stop loss of 0.7020.
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