AUDUSD has staged a comeback from its recent low of 0.6442, but faces a stiff challenge at the upper boundary of the falling price channel on the 4-hour chart. This resistance zone will determine whether the current rally is a mere blip in the downtrend or a sign of a potential trend reversal.
Upside Potential: Can the Rally Extend?
0.6624 Resistance in Sight: If the bulls manage to push the price above the price channel resistance, it could signal a significant breakout and pave the way for further gains towards the next resistance level at 0.6624. This would indicate a shift in momentum and potentially mark the start of a new uptrend.
Support Levels to Watch for Downtrend Continuation
0.6520: Initial Hurdle: If the upside momentum fades and sellers regain control, a breakdown below the initial support level of 0.6520 could trigger another decline. This could lead to a retest of the 0.6442 support level that marked the recent low.
Lower Support Levels: Further breakdown below 0.6442 would open the door for falls towards the 0.6400 area, solidifying the downtrend and suggesting the recent bounce was just a corrective move within the larger downward trend.
Overall Sentiment
The outcome of the price action around the 0.6520 support level and the price channel resistance will be crucial in determining AUDUSD’s next move. A breakout above the channel could indicate a potential trend reversal and upside potential towards 0.6624. Conversely, a breakdown below 0.6520 and subsequent breach of 0.6442 would reinforce the downtrend and suggest further decline towards 0.6400 or lower.
Disclaimer: This analysis is for informational purposes only and should not be considered as investment advice. Please conduct your own research before making any trading decisions.