TECHNICAL ANALYSIS
On the daily chart, it's evident that the AUDUSD pair is exhibiting a significant divergence with the MACD, which is often a signal of weakening momentum. This can potentially lead to pullbacks or reversals in the trend. Currently, we are witnessing pullbacks towards the trendline, but it's essential to keep an eye out for a possible upside breakout. Such a breakout would signify a reversal and could trigger a rally towards the 0.65 handle. Shifting our focus to the 4-hour chart, we've observed not just one, but two fakeouts in a span of two trading days. The price action remains turbulent and erratic within the confines of a descending triangle. The only reliable levels to rely on are the trendline and the support around the 0.6285 level. It's reasonable to expect sellers to re-enter the market around the trendline, where the 61.8% Fibonacci retracement level provides confluence. Buyers, on the other hand, will be looking for a break above the trendline as a signal to enter the market and position for a potential rally back to the 0.65 handle. Zooming in on the 1-hour chart, we can see that the trend on this timeframe is bullish, as the price continues to form higher highs and higher lows. Additionally, the moving averages have crossed to the upside, supporting the bullish sentiment. More aggressive buyers may consider relying on the minor upward trendline, where the red 21 moving average also provides confluence. This strategy offers a better risk-to-reward ratio when positioning for a break above the major trendline. Sellers, on the other hand, will be keen on the price breaking below the minor trendline, which could lead to increased bearish positions, ultimately targeting a breakout below the 0.6285 support level.
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