Will the AUDUSD break through and above 0.6800? Or will sellers enter the market again?
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The Australian dollar experienced a modest increase, surpassing 0.6700 on AUDUSD, as it recovered from its preceding downturn. This change was prompted by the release of minutes from the Reserve Bank of Australia’s April policy assembly, which indicated the board’s commitment to bringing down the inflation rate to their target range. The minutes also disclosed that the central bank’s decision to temporarily halt interest rate hikes this month was to allow for the collection of additional data. Many analysts have outlined that the RBA may consider further rate increases, should inflationary concerns continue to escalate.
Seasonally, the Australian Dollar performs poorly through the month of May. If the price rejects key resistance it could give sellers an opportunity to trade to the downside.
The price of AUDUSD remains above the key level of 0.6700. Currently the price is heading towards the recently formed resistance at 0.6800. This level combined with the seasonal outlook, could be a key level to watch. If the price rallies into this level and forms a false breakout pattern, buyers may become fearful and bail out of their long positions, giving sellers an opportunity. Price looks to be forming a bearish flag pattern, which can often lead to a breakout lower. If this were to occur, the price could trade down to 0.6200. Alternatively, if the price trades and closes above 0.6800, we could expect a move towards 0.7000.
The price on the chart has traded through multiple technical levels and some observations included:
- Price is forming a potential bearish flag pattern.
- A breakout could lead to a move down to the major lows at 0.6200.
- Price could reject the key highs that have formed an 0.6800.
- However, a break and close above this level could lead to the price rallying higher towards 0.7000.
Have you watched our GBPJPY analysis? You can see it here.
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