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On July 24th, I discussed the importance of 0.7030.
The area was a key battleground between buyers and sellers during the second half of 2018 and the first half of 2019.
However, AUDUSD remained below 0.7030 since April 2019.
That is until two weeks ago.
The July 21st close confirmed the breakout above 0.7030 and opened the door to the 0.7180 resistance area.
It looked like buyers were going to break through 0.7180 last week but failed to follow through on Friday.
So far this week, sellers are in control.
But as long as 0.7030 is intact as new support, the downside potential for AUDUSD will remain limited.
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At the same time, I wouldn’t want to buy the Australian dollar here, given that the pair is trading in the middle of a range.
The more favorable opportunity, in my opinion, would materialize with a retest of 0.7030 as new support.
That doesn’t mean 0.7030 will hold, though.
It will depend on how AUDUSD reacts to the new support area if tested this week.
Any bullish price action from 0.7030, such as a pin bar, could present a buying opportunity for a rotation higher toward 0.7180.
Above that, we have 0.7320 and 0.7480.
On the other hand, a daily close below 0.7030 would indicate weakness and expose 0.6930.