AUDUSD has made a significant move by breaking decisively above a sideways pattern that it has been trading within for over two months. This breakout has propelled the price to its highest level since January 2024, marking a notable shift in the market sentiment.
Resistance and Support Levels
With the pair now marching towards fresh highs, it faces the next major resistance at the December 2023 peak of 0.6870. Beyond that, the double top region of 0.6898, recorded last summer, presents another significant obstacle. On the other hand, immediate support lies at the May resistance level of 0.6713, which could potentially act as a buffer against any downward pressure.
Potential Pullback Risks
Despite the strong upward momentum, there are warning signs of a possible pullback in the near future. Both the RSI and stochastics indicators are signaling overbought conditions, suggesting that the recent advance may be overstretched. This raises the possibility of a reversal lower, which could bring the price back within its previous neutral structure.
The breakout of AUDUSD from its previous sideways pattern has brought about a renewed sense of optimism among traders. However, it is essential to remain vigilant about the potential risks of a pullback in the coming days. By carefully monitoring key resistance and support levels, traders can better navigate the current market environment and make informed decisions.
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