Chart of the day: AUD/USD is at make-or-break resistance, 0.6400 or 0.6820

AUD/USD is at make-or-break resistance where the price has recovered from the COVID-19 bear trend, retracing it in full and meets the 200-DMA, trendline resistance and prior daily support structure. 

The recent escalation of a war of words between the US and China could not have come at a worst time for the bulls hoping for a prolonged uptrend.

However, the environment remains bullish from a purely technical standpoint, although weak hands will likely wish to reduce positions and take profit. For an upside extension, a stop-run clear-out through resistance and a bar-room brawl may need to take place first. 

AUD/USD daily chart: Bulls meet confluence resistance area

Upside targets

A break of the trendline brings in the prior support structures and Fibos. The Fibonacci with most confluence comes as the 138.2% at 0.6757. A stretch to the 161.8% at 0.68 the figure is feasible, just below the neckline of the Dec-Feb H&S, 0.6826.

Bulls holding above support structure

Bullish 4-HR environment

At this point, it is not the cheapest entry-level and bulls will be looking for a discount prior to boarding this train very late in the trend. More often than not, it takes a few attempts to break trend lines, especially when there is a confluence of so may resisting factors, such as the 200-DMA and prior support structure.  Instead, a bearish case should be considered. 

Short on a break below support structure, stop above recent highs and 200-DMA/trendline resistance: 

0.6400 meets the 161.8% Fibonacci extension and prior support structure. 0.6450 is a prior target on the way there with the 138.2% and April highs.