AUD/USD consolidating near multi-week high for potential break.
AUD/USD: Consolidation near multi-week high sets stage for potential breakout beyond 0.6900
The US Dollar (USD) continues to face sustained selling pressure, marking a fresh low not seen since April 2022. Traders are increasingly convinced that the Federal Reserve (Fed) is approaching the end of its rate-hiking cycle. Concurrently, optimism surrounds the possibility of China implementing additional stimulus measures to bolster its fragile domestic economy. These factors work in favor of the Australian Dollar (AUD) as a China-proxy currency and provide a tailwind for the AUD/USD pair.
From a technical standpoint, the recent breakthrough of the static barrier at 0.6800, followed by an upward move, supports the bullish sentiment among traders. Furthermore, the daily chart's oscillators comfortably remain in positive territory and have yet to reach the overbought zone. This reinforces the potential for further near-term appreciation, with the eventual goal of surpassing the 0.6900 level, which served as a multi-month high in June.
If the AUD/USD pair gains momentum, it could aim to test the intermediate resistance zone of 0.6955-0.6960 before setting its sights on reclaiming the psychological level of 0.7000, a milestone not seen since February 14. The next notable hurdle is positioned near the 0.7025-0.7030 area, and a break above this region could propel spot prices even higher toward the round figure of 0.7100, ultimately targeting the year-to-date peak in the 0.7155-0.7160 range reached in February.
On the downside, any substantial corrective decline is likely to be viewed as a buying opportunity around the 0.6835 region. This should provide support and help limit the downside near the previously breached resistance level at 0.6800, which has now turned into a support level.
Pivot Point : 0.6850
Our preferred Scenario:
Long positions above 0.6850 with targets at 0.6900 & 0.6920 in extension.
Alternative scenario
Below 0.6850 look for further downside with 0.6825 & 0.6800 as targets
The US Dollar (USD) continues to face sustained selling pressure, marking a fresh low not seen since April 2022. Traders are increasingly convinced that the Federal Reserve (Fed) is approaching the end of its rate-hiking cycle. Concurrently, optimism surrounds the possibility of China implementing additional stimulus measures to bolster its fragile domestic economy. These factors work in favor of the Australian Dollar (AUD) as a China-proxy currency and provide a tailwind for the AUD/USD pair.
From a technical standpoint, the recent breakthrough of the static barrier at 0.6800, followed by an upward move, supports the bullish sentiment among traders. Furthermore, the daily chart's oscillators comfortably remain in positive territory and have yet to reach the overbought zone. This reinforces the potential for further near-term appreciation, with the eventual goal of surpassing the 0.6900 level, which served as a multi-month high in June.
If the AUD/USD pair gains momentum, it could aim to test the intermediate resistance zone of 0.6955-0.6960 before setting its sights on reclaiming the psychological level of 0.7000, a milestone not seen since February 14. The next notable hurdle is positioned near the 0.7025-0.7030 area, and a break above this region could propel spot prices even higher toward the round figure of 0.7100, ultimately targeting the year-to-date peak in the 0.7155-0.7160 range reached in February.
On the downside, any substantial corrective decline is likely to be viewed as a buying opportunity around the 0.6835 region. This should provide support and help limit the downside near the previously breached resistance level at 0.6800, which has now turned into a support level.
Pivot Point : 0.6850
Our preferred Scenario:
Long positions above 0.6850 with targets at 0.6900 & 0.6920 in extension.
Alternative scenario
Below 0.6850 look for further downside with 0.6825 & 0.6800 as targets
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