The AUD/USD pair witnessed some selling during the first half of the European session and dropped to a near three-month low, around the 0.7180 region in the last hour.

Having struggled to find acceptance above the 0.7200 mark, the AUD/USD pair met with fresh supply on Thursday and now seems all set to prolong a near one-month-old bearish trend. The intraday US dollar profit-taking slide remained cushioned amid hawkish Fed expectations, which, in turn, acted as a headwind for the major.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

AUD/USD trades flirt with 78.6% % Fibonacci retracement (Fibo.) of August-October upside within a month-long falling wedge bullish formation during early Thursday. That said, the quote retreats from an intraday high 0.7210 while keeping the rebound from a two-month low of 0.7183 by the press time.

Given the oversold RSI conditions, odds favoring the corrective pullback are high, suggesting a U-turn towards the stated pattern’s resistance line near 0.7270.

However, a daily closing past 0.7270 will confirm the theoretical run-up targeting the late June’s high close to 0.7620. During the run-up 61.8% Fibo. and convergence of the key DMAs, respectively around 0.7280 and 0.7350 will precede October’s peak of 0.7557 to challenge the AUD/USD bulls. 

Alternatively, further weakness past the 78.6% Fibonacci retracement level of 0.7200 will direct the quote towards September’s monthly bottom of 0.7169. Also challenging the quote is the support line of the stated wedge near 0.7165.

In a case where AUD/USD sellers dominate past 0.7165, the yearly low of 0.7105 should return to the charts.

All Hopes On Aussie For Hawkish Breakout

Nov 25 2021