There has been a decent bearish rally in the pair after it hit the critical resistance level at 0.81198. From that level, the pair sharply dropped near the daily support level at 0.76461 and formed a consolidation structure. Most of the long-term investors were on the sideline due to the pending U.S . However, the bears managed to breach the daily support level at 0.76461 and pushed the pair toward the next critical support level at 0.75039. Most of the aggressive buyers went long with the bullish price action confirmation signal since the long-term weekly trend line and 50% Fibonacci retracement level in line with the daily support level.
Figure: AUD/USD pair finding strong support at 0.7500 level
From the above figure, you can clearly see that the long-term bullish trend line support help the Aussie bulls to push the price higher in the global market. Most of the professional traders in the forex market long in the AUD/USD pair using the daily price action confirmation signal. Currently, the price is testing the minor resistance level at 0.7670.A daily closing of the price above the current resistance level will ultimately lead this pair towards the next critical resistance level at 0.77380.From that level, we might see some selling pressure in the Aussie dollar but eventually, the bulls are most likely to lead this pair towards the 200 weekly SMA.
On the downside, we need to break the weekly trend line support level to see some extensive selling pressure. A daily closing of the price below the 50% retracement level at 0.7500 will ultimately lead this pairs towards the 61.8% retracement level. From that level, we might see some ranging movement of the price but eventually, the sellers are most likely to challenge the low of 17th January 2016.This level is going to play a major role for the Aussie bulls in the market and the most of the long-term investors will be cautiously waiting for a clear price action confirmation signal to trade this pair. A clear break of the low 17th January 2017 will confirm the end of medium-term bullish correction of the AUD/USD pair. On the contrary, a bullish bounce will again lead this pair towards the 0.7500 mark.
In the last , the FED hiked interest rates on the basis of 25 points but the optimistic bulls are still seeing a bearish threat in the longer time frame. In the FOMC meeting minutes, FED chairperson Janet clearly stated that their economy is still struggling to deal with the current inflation rate problem and most importantly the projected rate hike for the year 2018 is still not clear. On the contrary, Mr. Trump’s statement directly contradicts Yellen’s speech, which has created a strong doubt in the investor’s mind. Despite the rate hike the U.S dollar index, which measures the overall value of the greenback’s strength against the six major rivals dropped from 94.06 and found some support at 93.30. Strong employment data also helped AUD/USD rally higher during the Asian trading session.
Considering the technical and fundamental parameters, the overall bias for AUD/USD remains bullish. However, we might see a major turnaround in the dollar’s strength followed by an optimistic statement regarding the pending tax-cut policy. Based on the technical and fundamental outlook, buying the deeps for short-term profit would be the perfect pick for retail traders.