AUD/USD Retests Key Resistance Zone
The US dollar weakened notably following the latest CPI data, showing a larger-than-expected dip to 3.2% in October. This decline, the first in four months, sparked a surge in AUD/USD on Tuesday, pushing prices back into a crucial resistance zone established since August (see daily candle chart below).
Wednesday’s price action saw AUD/USD briefly break above the resistance zone before retreating and closing near intra-day lows. This failure to hold above resistance has formed a bearish fakeout pattern.
AUD/USD Daily Candle Chart
Past performance is not a reliable indicator of future results
Switching to the 4-hour candle chart (below) provides a closer look at Wednesday's fakeout at the resistance level, offering more intricate details. This timeframe unveils a subtle yet notable double top reversal pattern, complemented by negative divergence on the RSI. However, we can also see the strength of momentum in Tuesday’s rally, and this should strike caution in AUD/USD bears.
AUD/USD 4hr Candle Chart
Past performance is not a reliable indicator of future results
Risk Management:
Traders eyeing a short position on AUD/USD might consider using Wednesday's fakeout highs for stop placement.
Upcoming U.S. Initial Jobless Claims data and U.S. Housing Starts data could potentially heighten volatility in USD currency pairs, influencing AUD/USD movements.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
Wednesday’s price action saw AUD/USD briefly break above the resistance zone before retreating and closing near intra-day lows. This failure to hold above resistance has formed a bearish fakeout pattern.
AUD/USD Daily Candle Chart
Past performance is not a reliable indicator of future results
Switching to the 4-hour candle chart (below) provides a closer look at Wednesday's fakeout at the resistance level, offering more intricate details. This timeframe unveils a subtle yet notable double top reversal pattern, complemented by negative divergence on the RSI. However, we can also see the strength of momentum in Tuesday’s rally, and this should strike caution in AUD/USD bears.
AUD/USD 4hr Candle Chart
Past performance is not a reliable indicator of future results
Risk Management:
Traders eyeing a short position on AUD/USD might consider using Wednesday's fakeout highs for stop placement.
Upcoming U.S. Initial Jobless Claims data and U.S. Housing Starts data could potentially heighten volatility in USD currency pairs, influencing AUD/USD movements.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
Disclaimer
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