AUD/USD Price Analysis: Bears lurking in resistance, eyes on 0.6550s
- AUD/USD bears seeking a move to snap 0.6600.
- 0.6550s are vulnerable on a downside extension.
As per the prior analysis, AUD/USD Price Analysis: Bulls could be lurking at the fresh cycle lows but continuation not off the table, the bulls have indeed started to correct from the fresh lows, but still, the bearish bias persists as the following will illustrate.
AUD/USD prior analysis
The M-formation on the daily chart was expected to act as the peak formation in a correction and lead to a move lower to break the structure on the downside.
AUD/USD H4 chart
The four-hour chart´s 50% mean reversion level near 0.6710 aligned with the neckline of the pattern that could continue to act as resistance.
The price deteriorated but there had been a lack of momentum in the US Dollar and AUD/USD climbed back into the barroom brawl as follows:
In the bearish thrust, there was a break in structure which left the bias to the downside so long as the bears showed up and guarded the 0.67s.
However, there was an adjustment to the daily chart´s Fibonaccis as follows:
The 38.2% Fibonacci acted as resistance and we got a strong bearish impulse from there to test 0.6600 and the -61.8% Fibo.
There were long positions from below 0.6590 and 0.6560 that were expected to see the market move into and further out:
... there was a lot of downside potential below. However...
If the bulls stepped in, then there were prospects of a correction into prior support near the 38.2% Fibonacci. The 50% mean reversion aligned with the round 0.6650 number also.
AUD/USD update
The price has run into the 38.2% Fibonacci so bears can be monitoring for bearish structure to lean against for the a position that will ride the possible downside extension for the days ahead.
AUD/USD H1 charts
Zooming in on the hourly chart, presuming that the correction has run its course, a break of the 0.6609 structure opens risk to the 0.6550s for the day ahead.