AUD/USD Price Analysis: Bulls firming to test critical 0.71 the figure that guards a much stronger correction

Bulls are testing the neckline near the current levels at 0.71 the figure. A break here will leave the bulls in good stead for a break of resistance around 0.7135.
A break of 0.7150 could open the way towards 0.7200 and then the 0.7260s and prior highs.

Ross J Burland FXStreet

There is a battle going on between the bulls and bears surrounding the Aussie and the US dollar. As per the prior analysis, AUD/USD Price Analysis: Bulls take the high road but bears emerge from critical H4 resistance, ''the Aussie has a habit of defying gravity.''

The US dollar rose on Wednesday, holding most of its earlier gains after minutes from the Federal Reserve's May meeting showed that most participants believed a half-percentage-point rate increase would likely be appropriate in June and July.

However, the Aussie bulls have stayed the course and the price continues to stick within the vicinity of the rising wedge formation.

AUD/USD H4 charts, prior analysis

It was stated that ''a break of the current resistance would be a significant development. There is a void between there and the 0.73 figure and the price imbalance could well be mitigated.''

On the flip side, it was explained that the bears were ''moving in and repeated failures at this resistance level would be expected to leave the ball in their court. A subsequent break of the next term support would be expected to encourage the bears back to the table and a snowball effect gathering momentum could result in a downside continuation and restest of the counter trendline.''

It was then stated that ''a break of the trendline and a run on sell stops would be expected to result in supply that could push the bulls back to the edge of an abyss at 0.6950,'' as per the following daily chart's analysis:

AUD/USD live market

As illustrated, the bears tried to take control below the rising wedge, but the bulls firmed at horizontal support and have taken the bears back into the channel. The pull of the M-formation was too much for the bears and the bulls are testing the neckline near the current levels at 0.71 the figure. A break here will leave the bulls in good stead for a break of resistance around 0.7135 and a run of 0.7150 could open the way towards 0.7200 and then the 0.7260s and prior highs.

Author

Ross J Burland

FXStreet

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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