The Australian dollar is flashing warning signs this week with a sustained break below a significant trend line from 2022.
Today’s video discusses what that could mean for AUDUSD, as well as key levels and targets.
I will also share the latest on the US Dollar Index (DXY) as it battles 103.50 resistance.
Watch the video below and scroll down for the annotated charts and analysis.
AUDUSD broke out of a massive descending trend line at the end of last year.
The level extends from April 5th, 2022, and has had several touches since that time, including one in early December before the breakout.
However, the Australian dollar has failed to hold above that trend line this week.
That confirms a potentially significant fakeout that could open up the 2023 lows at 0.6285.
For now, AUDUSD has found support right where we thought it might at 0.6520.
As long as the pair is above that mark on the daily chart, there’s a chance we get a retest of the 2022 trend line as new resistance.
That level comes in near 0.6600.
That’s also now a must-hold level for AUDUSD bears, as a sustained break above 0.6600 would negate the bearish idea.
But if 0.6600 holds as resistance on a daily closing basis, and if AUDUSD can get below 0.6520 on the higher time frames, there isn’t much to stop a run at 0.6285.
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