Missed the bullish breakout on AUD/USD recently?
Better watch out for this potential correction on its climb, as the Fib tool marks these inflection points.
Softer easing expectations for the Reserve Bank of Australia (RBA), spurred by mostly upbeat Australian CPI and GDP reports, have provided strong support for the Aussie so far this month.
At the same time, rising Fed rate cut expectations driven mainly by weak U.S. jobs data have dragged USD south, along with risk-on flows.
Can AUD/USD sustain its climb?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the Australian dollar and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The pair seems to be hitting a roadblock just slightly past the .6650 minor psychological level, possibly forcing it to retreat to nearby support levels to gather more bullish energy.
The Fibonacci retracement tool reveals that the 38.2% level lines up neatly with S1 (.6570) where Aussie buyers could hop in to sustain the uptrend. If so, look out for a continuation of the move back up to the swing high or to fresh upside targets near R2 (.6700) and a major psychological resistance.
A larger correction could still reach the 50% Fib near the .6550 minor psychological support and 100 SMA dynamic inflection point or the 61.8% level just above S2 (.6500) and another psychological level. Just keep an eye out for a sharp break below this area since this could hint that a move back to the longer-term support near .6400 is in order.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
