The AUDUSD currency pair has been experiencing a long-term downtrend, which has persisted since its peak at 0.8006. Despite a recent rebound from 0.6170, the pair remains below a significant falling trend line on the weekly chart, indicating the continuation of the bearish momentum.
As long as the trend line resistance holds, the current price action from 0.6170 can be considered a period of consolidation within the larger downtrend. This suggests that further downside movement towards the 0.6170 support level is still possible in the coming weeks or months.
Traders should closely monitor the 0.6800 resistance level, as a break above this barrier could potentially lead to a test of the next resistance at 0.7157, followed by the falling trend line. However, it is important to note that these resistance levels are within the context of the long-term downtrend.
Only a decisive break above the falling trend line resistance would signal a potential completion of the long-term downtrend. Such a breakout would suggest a shift in market sentiment and could open the door for further upward movement in the AUDUSD pair.
In summary, AUDUSD remains within a long-term downtrend, characterized by its position below a falling trend line on the weekly chart. The recent price action can be viewed as consolidation within this downtrend, and a potential decline towards the 0.6170 support level may occur. Traders should monitor resistance levels, such as 0.6800 and 0.7157, for potential reversal signals. Only a breakout above the falling trend line resistance would suggest a possible shift in the long-term trend. Effective risk management and staying informed about market developments are essential for successful trading in the AUDUSD pair.