- A breakout above the 38.2% Fibo retracement and the 200 EMA reinforces a bullish reversal structure.
- The RSI (14) has moved into a bullish range of 60.00-80.00, indicating pure bullish momentum.
- A bullish crossover, represented by the 20 and 200 EMAs adds to the bullish filters.
The AUD/USD pair is hovering in a tight range at 0.6955-0.6966 in the early London session, after moving lower from an intraday high near 0.6980. The asset has fallen sharply after failing to hold above Friday’s high of 0.6977. However, the uptrend has not changed yet.
On a four hour time scale, the asset has settled comfortably above the 38.2% Fibonacci retracement (which runs from Jun 3 high of 0.7283 to Jul 14 low of 0.6680) at 0.6920. The major pairs have failed to touch the 50% Fibo retracement for a second time, which comes in at 0.6984.
Also, a break above the 200-period EMA at 0.6900 adds to the bullish filters. A bullish crossover, represented by the 20 and 200 EMAs at 0.6903, indicates that more gains are ahead.
Also, the Relative Strength Index (RSI) (14) has moved into the bullish range of 60.00-80.00, signaling the continuation of a bullish momentum to come.
If the asset breaks above Monday’s high at 0.6965, the Aussies will push the asset towards the psychological resistance at 0.7000. Breaking above the latter would infuse fresh blood and the asset could post a June 16 high at 0.7069.
On the other hand, a sharp drop below the 0.6800 round level support will reinforce the dollar bulls. This could drop the pair towards the Jul 13 low at 0.6724, followed by the Jul 14 low at 0.6680.
AUD/USD Four Hour Chart
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Source: Fx Street
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