Aussie Is Ready For A Bullish Reversal
The AUDUSD pair on the Daily Chart has been on a downtrend since 10 May 2021, having found support on 20 August 2021 at 0.71053. The price attracted bulls who entered the market with long positions and as a result they have pushed the Aussie to higher levels, following a pattern of Non-Failure Swing after crossing above the level of previous high.
Bear’s Interest Fades
On top of that, the bears’ failure to record new lows hinted that the downtrend is coming to an end and the potential beginning of a rally.
When applying Oscillator Analysis to the price chart, one can see that the MACD Oscillator is recording values above the zero-line as well as the price managed to close above the 50-period Simple Moving Average line, a fact that also points to the upward direction and the bullish bias of the Aussie.
Additionally, the Relative Strength Index Oscillator stays above the fifty-line, which also indicates the positive sentiment in the market.
Meanwhile, the current price is approaching the resistance trendline and could be ready for a bullish crossover as the Aussie continues to take advantage over the US Dollar.
Both price action on the chart, as well as the indicators, are in agreement in terms with regards to the pair’s upward bias.
Applying the Fibonacci Retracement tool to the price chart, three price targets may be calculated:
- The first price target is estimated at 0.76677 (161.8%).
- The second price target is seen at 0.79758 (261.8%)’
- The third price target is projected at 0.84743 (423.6%).
One would expect that traders will be closely watching the reaction of the market at the historical key resistance level at 0.74773.
Of course, it remains to be seen whether the crowd psychology as well as the bulls’ pressure will manage to maintain the control of the market and push the Aussie to higher ground.
If the Aussie fails to make a bullish crossover to prolong the upward path, traders should watch for a move to retest reaction low of 0.71692 level which could invalidate the bullish reversal bias.
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