AUD/USD Surging Higher, Strong Resistance Ahead
Dwayne Buzzell | Apr 17, 2019 09:12AM ET
After the recent bearish spike in the AUD/USD pair through the major support level at 0.68304, the bulls are slowly trying to regain control of this market. Most of the aggressive price action traders already went long in this pair after the bullish pin bar formation right at the major support level at 0.68304. Currently, the pair is heading towards the 38.2% Fibonacci retracement level drawn from the high of 21st January 2018 to the low of 30th December 2018. Though buying the pair at the current price pattern formation seems lucrative but the long term bearish trend of this pair is still intact as long as the 38.2% Fibonacci retracement level holds.
AUD/USD weekly chart analysis
From the above figure, you can clearly see the bulls are slowly regaining control of this pair after the formation of the bullish pin bar. The next nearest stop for the bulls lies at 38.2% Fibonacci retracement level (0.72651). This level is going to play a vital role since the bulls will have to clear out this resistance level to confirm to reinforce its bullish correction movement. Any bearish price action confirmation signal near the 38.2% Fibonacci retracement level will give us an excellent selling opportunity to this pair. However, the leading analyst of the reputed Forex broker is expecting a strong move towards the 50% Fibonacci retracement level since the 100 and 200 weekly SMA is slowly merging.
A weekly closing of the price above the critical resistance level at 0.72651 will eventually lead this pair towards the 200 SMA or 50% bearish retracement level. This level might provide the ideal selling opportunity in this pair since we have plenty of resistive candles just above this level. A clear break of this level will eventually result in a retest of the 61.8% retracement level. If the critical resistance level at 0.75894 gets comprised, we will have a temporary bottom of this pair near the critical support level at 0.67234
On the downside, we need to break below the nearest support level at 0.70236. The bears will have to do struggle hard to clear out this support level due to a cluster of supportive candles. However, a clear break of the critical support level at 0.70236 will eventually lead this pair towards the next critical support level at 0.67200.
Fundamental Factors
The recent performance of the U.S economy is a little bit cloudy since the FED didn’t come up with a clear clue regarding their next rate hike decision. However, most of the big players are cautiously waiting for Monetary Policy Meeting Minutes for the Aussie economy. If the RBA hikes their interest rate, chances are very high the bears will regain control of this market. On the contrary, an imminent delay or dovish statement from RBA officials will refuel the AUD/USD bulls. Considering the technical and fundamental parameters, it’s better to stay in the sideline until the market gives a more favorable trading opportunity.
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