AUDUSD touching important Support on Daily Chart

6 dic

The AUD/USD pair has experienced a notable decline of -7.82% in recent weeks, without any significant recoveries. This drop has brought the price to a key horizontal support area, aligning with the previously identified triple bottom level on the daily chart. Additionally, the price has tested an uptrend line that has provided support since mid-2022. The overlap of the horizontal support and the uptrend line creates a technically significant zone, indicating a potential slowdown in selling pressure.

Bullish Scenario

If the price breaks above the downtrend line, acting as dynamic resistance, it could signal a shift in market sentiment, allowing buyers to regain control. Fibonacci retracement levels would then serve as potential targets:

• An entry point could be considered if a candle closes above the downtrend line on the daily chart.
  
• The first target may be near the 38.2% Fibonacci level at 0.6605 (approximately 110 pips).
  
• The second target could be around the 50.0% Fibonacci level at 0.6670 (about 170 pips).
  
• A stop loss might be placed just below the recent low at 0.6395 (around 100 pips).
  

For confirmation of the bullish scenario, the price needs to stay above the dynamic resistance and begin forming higher highs and lows.

Bearish Scenario

Conversely, if the price falls below the horizontal support at 0.6400, it would create room for further declines, potentially invalidating the triple bottom pattern and indicating a continuation of the downtrend. In this case, the next significant support level would be around 0.6300, with chances of moving even lower.

Impact of US Employment Data

The upcoming US employment data, particularly the Nonfarm Payroll figures, could significantly influence the AUD/USD pair. Weaker-than-expected results may weaken the US dollar, benefiting the Australian dollar and increasing the likelihood of breaking the downtrend line. Conversely, strong US labor market data could exacerbate selling pressure, pushing AUD/USD lower.

Summary

The AUD/USD is at a pivotal juncture on the daily chart, with the convergence of horizontal support and an uptrend line suggesting a possible reversal. However, the market's direction will hinge on subsequent technical movements and, crucially, on US economic data that could shift the balance of power.

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