Overview:- AUD/USD is doing so well and bulls did the great job. The stories of their victory we can be seen on the daily chart i.e. one sided rally from 0.5505 to 0.6982 levels which is an incredible move from bull’s campaign. From yesterday onwards pair remained depressed and today also we are getting a bid weakness in the pair as pair is trading and sustaining below the 0.6900 level.
A fair ‘V” shape recovery on daily as well as weekly chart can be seen and pair is trading and moving in an uptrend and some correction are expected at these levels, however this correction will be big due to big rally and yesterday pair also reversed from the key resistance level on daily as well as weekly chart.
On 4 hourly chart we got some trend reversal signals which can’t be ignored and MACD is also showing bearish crossover on the 4 hourly chart. Also, RSI also 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 0.6750 level 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 only can be seen above 0.6940 and that will open the way towards another major resistance of 200 SMA line which is lying at 0.7265 on weekly chart. On a bigger picture trend is up so in an uptrend market always buy on dips. The long term view still bullish on the pair as long as 0.6500 level remains intact but on the short term basis some selling pressure is expected till 0.6750 and 0.6600 level.
The 0.6970 can be considered as key resistance level followed by 0.7040 where 0.6750 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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