AUDUSD Analysis – May 7, 2023

The Australian dollar has been in a long-term downtrend against the US dollar since reaching a high of 0.8006 in Feb 2021. The price action from the low of 0.6170 is likely a consolidation for the downtrend, with the pair currently trading in a range between 0.6550 and 0.6800.

On the weekly chart, AUDUSD remains below a falling trend line that originated from the 2021 high. As long as the trend line resistance holds, the long-term downtrend remains intact, and the pair could see further downside potential.

Currently, the pair is finding support around the 0.6550 level. If this support level is broken, the next level to watch for support is at 0.6380.

On the upside, the resistance levels are at 0.6800 and 0.7000. A break above the falling trend line resistance and a sustained move above 0.7157 would be needed to invalidate the long-term downtrend and suggest a trend reversal.

In the near term, range trading between 0.6170 and 0.7157 could be expected, with the bias on the downside as long as the falling trend line resistance holds. Traders may want to watch for a break of support or resistance levels to confirm a move in either direction.