AUDUSD has staged a comeback from its recent low of 0.6442, but faces a critical hurdle at the top of the falling price channel on the 4-hour chart. This resistance level will determine whether the current rally signifies a trend reversal or merely a temporary pause within the downtrend.
Upside Potential: Can the Rally Break Through?
- 0.6624 Resistance in Focus: If the bulls manage to push the price above the falling channel resistance, it could signal a potential breakout and pave the way for a further rally towards the key resistance level of 0.6624. This would indicate a shift in momentum and potentially mark the start of a new uptrend.
Support Levels to Watch for Downside Continuation
- 0.6520: Initial Hurdle: If the upside momentum fades and sellers regain control, a breakdown below the initial support level of 0.6520 could trigger another decline. This could lead to a retest of the 0.6442 support level, which represents the recent low.
- Lower Support Levels: Further breakdown below 0.6442 would open the door for falls towards the 0.6400 area, solidifying the downtrend and suggesting the recent bounce was just a correction.
Overall Sentiment
The outcome of the price action around the 0.6520 support level and the falling channel resistance will be crucial in determining AUDUSD’s next move. A breakout above the channel would indicate a potential trend reversal and upside potential towards 0.6624. Conversely, a breakdown below 0.6520 and subsequent breach of 0.6442 would reinforce the downtrend and suggest further decline towards 0.6400 or lower.