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AUD/USD Beyond the 0.6700 Psychological Level

June 1, 2020 at 6:08 by Dorin Rosu

The Australian dollar versus the US dollar currency pair managed to climb all the way to the important 0.6700 level. Should the bulls expect a surprise comeback from the bears?

Long-term perspective

The rally from the solid area of 0.5700 accomplished to pass the double resistance made possible by the 0.8386 level and the descending trendline that starts from the 0.7034 high.

After a consolidative period that spanned over a month and a half, the bulls confirmed the intermediary level of 0.6553 as support and extended until the key level of 0.6722, which corresponds to the psychological level of 0.6700, a very important area.

The next development could be the continuation of the appreciation so that the price has where to throwback to. In other words, the price may depart from 0.6722 towards the north, but not too far away, as the bulls need a support to confirm in order to continue with further advancement. The role of support could very well be played by 0.6722, after the price prints a leg down to validate it.

Another possibility is for the price to retrace from just under the 0.6722 level. But as long as the 0.6680 high is confirmed as support, further advancement is to be expected. However, if 0.6680 fails, then the level of 0.6623 could serve as support. In this case, another consolidative period may emerge, limited by 0.6623 as support and 0.6722 as resistance. This consolidative period could spark another upwards movement. The main bullish target is represented by 0.7010.

However, if the bears take over and 0.6623 fails to limit any further declines, then 0.6386 is the main bearish objective.

Short-term perspective

The price pierced the resistance of a bullish triangle, whose base is marked by the 0.6680 high and the 0.6567 low, and continued until the 0.6746 key resistance level.

The first possible scenario is for the price to oscillate under the 0.6746 level for a short while until passing it. Once it does, the next target is 0.6816.

The second scenario is to see the price falling back towards the 0.6660 level. If it confirms it as support, then the bulls could have another run towards 0.6746. But if the price gets beneath 0.6660, then the decline could further extend until 0.6600 and even to 0.6555.

Levels to keep an eye on:

D1: 0.6722 0.6623 0.7010 0.6386
H4: 0.6746 0.6816 0.6660 0.6600 0.6555

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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