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AUDUSD Bulls React to Yesterday's Red Candle - Action Forex

  • AUDUSD in the green again today, close to its 4-month high
  • Aggressive move higher from the October lows
  • Momentum indicators potentially ready to signal a reversal

AUDUSD is trying to register a strong green candle as it continues to trade above the key February 2, 2023 descending trendline. It has been an aggressive rally from the 2023 low of 0.6269 recorded in October, with AUDUSD currently hovering close to its 4-month high. All eyes are now on the momentum indicators for any clues on the continuation of the current upleg.

In more detail, the Average Directional Movement Index (ADX) is trading above its 25-threshold, thus signaling a decent bullish trend in the market. Similarly, the RSI continues to hover comfortably above its 50-midpoint, close to a 4-month high, but it appears unable to make a higher high. More interestingly, the stochastic oscillator is stuck at the upper end of its overbought area. While it can stay there for a while, the current movement could be seen as an early reversal signal.

Should the bulls remain confident, they could try to stage a move towards the July 14, 2022 low at 0.6681. Higher, the 38.2% Fibonacci retracement level of the April 5, 2022 – October 13, 2022 downtrend and the November 15, 2022 high at 0.6739 and 0.6797 respectively will probably test the bulls’ determination. If successful, the next key resistance area appears to be at the 50% Fibonacci retracement level of 0.6915.

On the flip side, the bears are probably keen to put a stop at the current bullish move. They could try to push AUDUSD back below the February 2, 2023 downward sloping trendline and the 200-day simple moving average (SMA) at 0.6576. They could then test the support set by the rectangle’s lower boundary and the 23.6% Fibonacci retracement at the 0.6521-0.6561 range.  If successful, they could stage a move towards the 0.6421-0.6471 range.

To sum up, AUDUSD bulls could have the chance for a higher high if they manage to withstand the expected bearish pressure and keep AUDUSD above the February 2, 2023 trendline.

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2023-11-30 08:34:03Z
CBMib2h0dHBzOi8vd3d3LmFjdGlvbmZvcmV4LmNvbS9jb250cmlidXRvcnMvdGVjaG5pY2FsLWFuYWx5c2lzLzUyOTY2Ni1hdWR1c2QtYnVsbHMtcmVhY3QtdG8teWVzdGVyZGF5cy1yZWQtY2FuZGxlL9IBAA

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