AUD/USD Price Analysis: Witnesses a time correction after facing barricades around 0.7000
- A Bullish Flag formation is hinting a continuation of the upside journey.
- The asset has entered into a time correction after facing long liquidations around 0.7000.
- Aussie bulls have established above the 200-EMA firmly.
The AUD/USD pair is displaying a time correction after a perpendicular upside move to near the psychological resistance of 0.7000. Earlier, the aussie bulls witnessed a juggernaut rally after defending the weekly lows of 0.6886 on Friday.
On an hourly scale, the asset is forming a Bullish Flag chart pattern that signals a consolidation after an upside move. A typical inventory distribution phase in a bull flag is used for the initiation of longs by those investors, which prefer to enter an auction after an establishment of a bullish bias.
The antipodean is defending the 20-period Exponential Moving Average (EMA) at 0.6974. Also, the asset has managed to establish above the 200-EMA at 0.6954 confidently, which adds to the upside filters.
Meanwhile, the Relative Strength Index (RSI) (14) has shifted back into the 40.00-60.00 range after failing to sustain in the bullish range of 60.00-80.00. The upside still looks favored and a breach above 60.00 will strengthen the aussie bulls further.
A decisive move above the six-week high at 0.7047 will send the major towards the round-level resistance of 0.7100, followed by May 31 high at 0.7204.
Alternatively, a downside break below Wednesday’s low at 0.6885 will drag the asset towards July 15 high at 0.6806. A slippage below July 15 low will trigger the downside risk to July 5 low at 0.6761.
AUD/USD hourly chart
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Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
