The latest market analysis for the Australian dollar against the U.S. dollar (AUD/USD) reveals crucial developments following a significant technical movement. The recent breaching of the 0.6524 resistance level, which has now turned into support, indicates that the rebound from a low of 0.6439 may have reached its peak at 0.6616. As such, the intraday bias has shifted towards the downside, suggesting a potential deeper decline towards the next support levels at 0.6349, and possibly further to the 0.6413 cluster support. This cluster, which coincides with the 38.2% retracement from the swing low of 0.5913 to the swing high of 0.6706, sits at approximately 0.6403.
Market analysts anticipate a strong support response within the 0.6403 to 0.6413 range, which is expected to facilitate a rebound and may lead to continued range trading. However, if trading persists below these levels, it could signal a more pronounced bearish sentiment in the market.
Examining the longer-term trend, there remains no definitive indication that the downtrend originating from the 0.8006 high in 2021 has reached an end. The recent rebound starting from 0.5913 appears to be a corrective movement rather than a trend reversal. The outlook remains pessimistic as long as the 38.2% retracement level of 0.8006 to 0.5913, situated at 0.6713, holds firm. A break below the 0.6413 support level would further reinforce the bearish outlook, implying rejection at 0.6713.
Conversely, external bullish signals such as the bullish convergence observed in the weekly Moving Average Convergence Divergence (MACD) indicator could potentially alter the trajectory. Should the AUD/USD manage a sustained break above 0.6713, it would represent a marked shift towards a bullish trend reversal, with targets escalating towards the structural resistance located at 0.6941 for further confirmation of this trajectory.
As traders navigate this volatile atmosphere, close attention will be paid to key support and resistance levels to guide their strategies in the upcoming sessions.
