AUD/USD jumped through the 0.66 handle after the Federal Reserve stunned markets with a rate cut to fight the coronavirus. The central bank slashed interest rates by 50 bps in an unscheduled meet; the decision was unanimous.
As of current price, however, the H4 candles are attempting to regain 0.66 to the downside after fading familiar channel resistance, extended from the high 0.7031, which happens to merge closely with a 61.8% Fibonacci retracement value at 0.6630. Note just north of the said channel resistance also lies a 161.8% Fibonacci extension point at 0.6651. What’s also notable from a technical perspective on the H4 timeframe is the relative strength index (RSI) seen closing in on overbought levels.
On more of a broader perspective, daily activity recently checked in with channel support-turned resistance, taken from the low 0.6677. Surpassing this level today could lead to resistance at 0.6677 making its debut. This follows a disorderedly response from support coming in at 0.6508. Traders may find the convergence of the said daily channel resistance and the H4 resistance structures mentioned above of interest.
AUD/USD on the weekly scale still, despite recent recovery above 0.66, has eyes for support coming in at 0.6359. Eight out of nine weeks has seen the pair register losses, since topping a touch south of the 2019 yearly opening level at 0.7042, and completing a five-month rising wedge pattern. Note the primary trend has faced south since 2018, and we’re now testing decade lows in this market.
A H4 close south of 0.66 would be an interesting scenario today, likely confirming seller intent off H4 and daily resistances, targeting daily support underlined above at 0.6508, closely trailed by the 0.65 handle on the H4 timeframe.Conservative traders may elect to wait and see if a retest forms at the underside of 0.66 before pulling the trigger. This helps confirm seller intent. Though like everything trading, nothing is guaranteed, therefore adopting strict risk management at all times is a must.
Disclaimer: The information contained in this material is intended for general advice only.