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AUD/USD Price Analysis: Bears move in and eye 0.6620s and a weekly 61.8% ratio

  • AUD/USD are moving in and testing the bull's commitments in key weekly support area.
  • Bears eye a break towards the 0.6640s while below 0.6670 near term.

AUD/USD is lower on the day, down some 0.57% at the time of writing after falling from a high of 0.6698 to a low of 0.6652.  The currency has been better offered following the Reserve Bank of Australia which kept interest rates at 4.10%. Markets, however, expect that September will most likely be the timing for the next rate increase, and this has been reflected in the price over the last weeks. 

Meanwhile, from a technical perspective, AUD/USD bulls have moved aside and the bears are taking control into a key support area on the charts as the following multi-time-frame analysis will illustrate 

AUD/USD weekly charts

Zoomed in, we can see that the price broke a key 0.6710 resistance to recently form a fresh daily high which has changed the bearish character to bullish after a sweep of stops below the prior 0.6450 channel support. If bulls commit in the area between the 50%, 61.8% and 78.6% ratios, the neckline of the bullish W-formation, then there are firm possibilities of a retest of the trendline resistance in the build-up to higher highs with eyes set on the 0.7150s. 

AUD/USD daily chart

However, this current price action is bearish and risks a test of below 0.6640 and then 0.6600. A break there will leave 0.6537 vulnerable and then the swing low in the 0.6450s.

AUD/USD H1 chart

This leaves near-term prospects bearish while below the hourly resistance of the M-formation's neckline and resistance 0.6670 above as follows:

The 0.6640s are vulnerable for a test in the session ahead that guards a run to 0.6620 and in-the-money long positions below the weekly 61.8% Fibonacci ratio as drawn on thew weekly chart above.

Author

Ross J Burland

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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