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AUD/USD at 0.7000 Once Again

June 8, 2020 at 5:40 by Dorin Rosu

The Australian dollar versus the US dollar currency pair climbed back to the high of 2020. Could the bears benefit from this?

Long-term perspective

After printing the low of 0.5701, the price began a rally that managed to pass the double resistance noted by the descending line that starts from 0.7034 and the 0.6386 level.

Once above this area, the oscillations took the shape of a consolidative period which, towards the end of April, stamped the 0.6505 low that, being a higher low, gave the bulls the motivation they needed to continue their march.

And so they did, as the resulting surge head for the 0.7010 resistance level and just a hair away from the year’s high of 0.7019.

In this context, the first scenario is the one in which the price, given the momentum, pierces the 0.7010 resistance level, confirms it as support, and continues, aiming for the 0.7191 level.

The second scenario, which also gives credit to the bulls, stands for a consolidation phase, limited by 0.7010 as resistance and 0.6873 as support, that will eventually allow the resistance to give way, thus allowing the price to extend to the same 0.7191 primary objective.

However, with or without the consolidation phase, the bulls might allow the bears to send the price to 0.6722. In this case, the bulls will let the bears carry their water, as the 0.6722 level, even if it serves as a bearish target, is also works as a bullish springboard.

Only if 0.6722 fails, then the bears would be entitled to believe that it’s really their turn, and in this case, they could dive the price back again to 0.6386.

Short-term perspective

The price is in an ascending movement that seems to be losing its steam, as 0.6949 made it come back for another run in order to pass it and 0.7002 limited further advancements.

So, the price could enter a consolidative period, bounded by 0.7002 as resistance and 0.6949 as support (or 0.6889 if 0.6949 fails).

Once 0.7002 gets pierced, the price can continue further towards 0.7081, but if the 0.6889 level is the one that gives way, then 0.6746 is the next stop.

Levels to keep an eye on:

D1: 0.7010 0.7191 0.6873 0.6722 0.6386
H4: 0.7002 0.6949 0.6889 0.7081 0.6746

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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