AUDUSD heading towards critical support level, cautious bulls wait
The Aussie dollar has sharply fallen against the might U.S dollar after it hit the 200 days SMA on the daily chart. The bulls lost most of the bullish momentum in the global market after it hit the major resistance level at 0.78128.Prior to the closing last trading week, the AUDUSD pair breached a major support level at 0.7746 which has open the door towards the next support level at 0.76384.This level is going to provide a significant amount of buying pressure to the AUDUSD pair. Most of the expert traders will be looking for bullish price action confirmation signal near the critical support level at 0.76384 to execute the fresh long order in the global market.
AUDUSD daily chart analysis
Figure: AUDUSD sharply falling towards the 38.2% Fibonacci retracement level
From the above figure, you can clearly see the sellers are pushing this pair significantly lower towards the 38.2% bullish Fibonacci retracement level.( Drawn from the low of 10th January 2016 to the high of 21st January 2018).This level is going to provide a significant amount of buying power to the Aussie bulls which might lead this pair towards the major resistance level at 0.77433.A daily closing of the price above the major resistance level at 0.77433 will ultimately lead this pair towards the bearish 61.8% Fibonacci retracement level. This level is very crucial since a valid break of that level will confirm the end of a medium-term bullish rally in the AUDUSD pair.
AUDUSD weekly chart analysis
Figure: the AUDUSD testing weekly trend line support level at 0.76305
In the weekly chart, the Aussie dollar is currently testing the long-term trend line support level at 0.76305.If the bulls manage to take control of the market, the pair will head towards the major resistance level at 0.81139.This level is very crucial for the long-term investors since we have a double top formation right at this level. However, a weekly closing of the price above the major resistance level at 0.81139 will confirm the initial bottom formation at 0.76305.
On the downside, we need to clear the major support level at 0.76305 to see fresh selling pressure into this pair. A clear break of the weekly trend line support level will ultimately lead this pair towards the 50% retracement level. From that level, we might see some decent bullish bounce but a break of the 50% retracement level will lead this pair towards the 61.8% retracement level. This level is very crucial for the Aussie bulls since a weekly closing of the price below this level will result in a sharp fall towards the major support level at 0.68320.Fundamentally the Aussie economy is doing relatively well in the recent days but FED officials are optimistic about their rate hike program. This has created a massive confusion in the mind of leading investors regarding the next movement of this pair. However, considering the technical and fundamental factors of the market, the overall bias remains bullish for this pair.