Wednesday, June 27, 2018

Are We Observing A Test Of The Support Or Is AUD/USD Renewing Its Downward Trend?

After a move north AUD/USD returned to test the support at 0.7340 – 0.7300 (the golden line) which is natural for pairs that are in a strong support or resistance zone.

If we examine the smaller time frame, however, for example the M30 one, we would notice how range-bound the pair is, which is an expression of the struggle between of the bulls and the bears on the market.

In such situations the best thing one can do is wait. If there’s a breakout and the price remains below the local low at 1.72453 that would mean that the pair will head for the next support at 0.7170 – 0.7110 (in blue) without further correction, so that move can be traded.

The alternative scenario is for a deeper correction to 0.7470 – 0.7480.