Australian Greenback Value Forecast: AUD/USD Threatens Reversal

Australian Greenback, Aussie, AUD/USD Value Forecast:

• AUD/USD has loved a really robust bullish run for the reason that March lows.
• Aussie value motion started to calm down within the latter-portion of July as a giant zone of longer-term resistance started to come back into play.
• At this level, a rising wedge formation has shaped and this may usually be approached with the intention of bearish reversals. Is AUD/USD nearing a flip after a really robust 4 month uptrend?

Aussie Begins to Lag, AUD/USD Exhibits Tendencies of Flip

Like a phoenix rising from the ashes, AUD/USD put in a powerful restoration following an early-year hunch as value motion jumped as much as a contemporary yearly excessive. Whereas it took about two-and-a-half months for AUD/USD to crash right down to a contemporary 17-year low after the 2020 open, it took about one other two-and-a-half months for the pair to recuperate everything of these losses, after which some.

By way of all of it, the .7000 huge determine loomed giant all through; as this value helped to cap resistance because the New 12 months opened and got here again into play in June after the pair had recovered. This resistance even held the advance for slightly over a month, serving to to carry the highs from mid-June to mid-July. However patrons ultimately took out the psychological stage on the way in which as much as .7185-.7250, and that’s when the plot begins to thicken.

Since that resistance zone got here into play in late-July, the Aussie advance has begun to indicate tendencies of a stall; permitting for the construct of a rising wedge formation. Such formations will usually be approached with the intention of bearish reversals, pushed by the logic that the identical trepidation proven by bulls at assessments of resistance will, ultimately, play via to permit for a break of help. To study extra about such formations, there’s a complete part on rising wedges and falling wedges within the DailyFX Schooling part.

AUD/USD Day by day Value Chart

Chart ready by James Stanley; AUD/USD on Tradingview

Happening to the two-hour chart to get a extra granular take a look at the matter, and we will see how AUD/USD has re-engaged with the Fibonacci stage at .7185. It is a huge stage, and has proven quite a few inflections over the previous couple of years because it’s the 61.8% Fibonacci retracement of the 2001-2011 main transfer.

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This additionally highlights a really latest emergence of lower-lows together with the potential for a lower-high, significantly ought to resistance maintain within the present space. This could additional help a thesis for reversal potential within the pair, in search of a maintain beneath final week’s swing excessive across the .7242 space. Deeper help potential exists across the .7060-.7072 zone, after which the .7000 psychological stage turns into of curiosity.

Notably, that .7000 stage supplied appreciable resistance when value motion was advancing however, to this point, hasn’t proven a lot for help for the reason that July breakout.

AUD/USD Two-Hour Value Chart

Chart ready by James Stanley; AUD/USD on Tradingview

— Written by James Stanley, Strategist for DailyFX.com

Contact and observe James on Twitter: @JStanleyFX