AUD/USD’s Support Dilemma Breakout or Breakdown

By Tomasz Wisniewski|

Published: January 10 2024, 06:28 GMT+0

AUD/USD’s Support Dilemma Breakout or Breakdown


Welcome back, traders. Today, we’re delving into the intriguing dynamics of the Australian Dollar versus the American Dollar, a pair that’s currently at a crucial juncture on the Forex charts.

Since the year’s turn, the Australian Dollar to American Dollar pair has been navigating a bearish correction, an interesting twist following its strong uptrend in late December. The crux of this movement lies in its recent encounter with a pivotal support zone, marked just below 0.668.

This key horizontal support, represented in vibrant orange on the chart, isn’t standing alone. It’s bolstered by a dynamic counterpart – a mid-term uptrend line colored in blue. This duo has successfully fended off bearish advances thrice this January, presenting a strong case for a bullish stance.

But the story doesn’t end there. Looming above is the black downtrend line, a formidable resistance that the pair needs to confront. The prevailing sentiment suggests a potential bullish breakout, pushing past this resistance in due course.

However, the markets are nothing if not unpredictable. Should the pair capitulate, breaking below the supportive embrace of the blue uptrend line, we’d witness a paradigm shift. This scenario would paint a bearish picture, with the green horizontal support emerging as the next plausible target.