Aussie dollar testing critical support level, Bulls wait on the sideline

There has been a sharp decline in the AUDUSD pair after it breaches the critical support level at 0.77429 on the daily chart. Most of the professional price action traders made a decent profit by shorting the pair on the bearish breakout. Currently, the pair is testing the daily support level at 0.75032 on the daily chart. Prior to the closing of the last trading week, the price hammered up from that critical support level which is clear indication that the bears are getting exhausted in the market. In order to establish a long-term bearish trend, we need a daily closing of the price below the critical level at 0.75032

AUDUSD daily chart analysis

Figure: AUDUSD pair testing critical support level in the daily chart

From the above figure, it’s pretty clear that the bears are having a tough time to break the daily support level. Most of the professional traders are waiting for bullish price action confirmation signal to execute their long orders in favor of the medium term bullish trend. If this current support level then the ultimate target for this pair would be the next critical resistance level at 0.76887.This level is going to provide some decent selling pressure since the 200 day SMA also coincides with the daily pivot level. However, a daily closing of the price above the 200 days SMA will ultimately lead this pair towards the 100 days SMA. On the downside a clear break of the current support level will lead this pair towards the low of 9th may 2017.

AUDUSD weekly chart analysis

Figure: AUDUSD testing weekly the bullish trend line support

In the weekly chart, we have a strong bullish scenario. You can clearly see that the pair is testing the long-term bullish trend line. If the bulls manage to find some fresh buying pressure at the current level then the ultimate target for this pair would the nearest weekly resistance at 0.77388.If the bulls manage to breach the first weekly resistance level then it will ultimately challenge the high of 3rd September 2017.On the contrary, a clear break of the weekly trend line support level at 0.75032 will bring strong selling pressure in the market.

The upcoming week is very critical for the currency traders as we have FOMC meeting minute scheduled on Thursday. If the FED comes with hawkish hike then the Aussie dollar will sure breach the weekly trend line support level creating a new low in the market. On the contrary, a dovish rate hike will help the Aussie bulls to create another fresh bullish run in the long time frame. In the very beginning of the week we might see some ranging movement of the market and buy the deep with bullish price action confirmation signal will be a good option for the risk takers. However, trailing stop loss features should be used inured to maximize the profit potential in the market. Due to the possibility of high market volatility, it is also advised to use less than 2% risk while trading this pair.