I made it a point to avoid the AUDUSD in August. The pair has been trading in the same range since late July when buyers retested the 0.8065 handle. This level was a key factor between January and May of 2015. Its influence is especially evident when viewing the weekly chart.
However, the price action since the 15th of August warrants consideration. Although the pair is still range-bound, there is a 4-hour pattern that suggests buyers could be tiring.
If this channel were forming at a descending angle, it could be considered a bullish formation. As it is, this looks more like a final move from AUDUSD bulls following the sharp rally that began in early July.
Despite the possible exhaustion pattern, buyers are once again challenging resistance at 0.8020/30. But I won’t be interested in a short position until sellers secure a close below channel support near 0.7900/20. Such a close would expose the March swing high at 0.7750.
Alternatively, a close above channel resistance would negate the idea. With that said, it’s going to take a daily close above the current 2017 high of 0.8065 to extend this four-month rally.
There’s also a chance we could see a sell signal develop below the 0.8065 handle. Depending on how and where it forms, I may consider a short entry near current levels. Either way, I’m in no hurry to sell the AUDUSD given the current state of today’s rally.
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