On February 19th I discussed the AUDUSD.
More specifically, I pointed out how the January 3rd bounce may be indicative of a bottom.
The fact that AUDUSD bounced from new trend line support from the 2018 high was a big deal.
However, since the January 3rd bullish pin bar, the price action has been uneventful to say the least.
In fact, AUDUSD has made no progress since January 9th.
But despite the lack of direction, I have to take a slight bullish bias as long as that January 3rd pin bar is intact.
Now, here’s the key to that thesis…
Buyers need to clear trend line resistance near 0.7240 on a daily closing basis.
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That last part is critical. It isn’t enough for the pair to pierce the level. We need to see a daily close above it to confirm the breakout.
Attempting to buy AUDUSD before that happens is far too speculative and risky in my opinion.
And as for shorting AUDUSD, I think that too is too risky given the recent sideways movement coupled with the January bounce from new support.
To summarize: I’m neutral while the pair is below 0.7240, but I am willing to turn bullish following a daily close above the level.
Key resistance above 0.7240 isn’t far away at 0.7320. However, a close above trend line resistance could be the beginning of a broader rally.
Alternatively, a move lower would likely encounter bids near 0.7060.
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