AUD/USD Technical Analysis: The 0.7120 Breakout Zone
On the 4-hour chart, AUD/USD is building up a bit of a pressure cooker, with the price basically ricocheting off of support and resistance lines as it creeps up into a rising wedge that’s starting to get pretty tight against that descending resistance line. To our relief, price has now reclaimed the 50-period moving average, and those higher lows from 0.6990 are starting to tell us that its looking like the buyers are getting the upper hand and absorbing some of that supply that’s been weighing us down.
If we can close above 0.7120 on the 4-hour chart, that’d confirm a major breakout – which just so happens to expose the next level of resistance, that horizontal one at 0.7153 and that prior swing high at 0.7183.
The RSI has pushed up past 55, which tells us momentum is likely on the rise, but we’re still a ways off from getting to overbought territory, so there’s still room to run before things get dicey. But then again, a failure at the 0.7090–0.7120 zone and we’re looking back toward 0.7017 support in no time.
If the price slips below 0.6990, we’ll be looking at a whole different picture – one that would put the recovery thesis right out the window.
Bottom Line: AUD/USD is right on the cusp of something big, friends – and we’re keeping a close eye on that 0.7120 resistance level as the FOMC follow-up commentary starts to roll in.
