Daily Price Action
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AUDUSD Reaches First Target; Where to Next?

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On December 14 the AUDUSD closed above a major hurdle at 0.7635. The level served as support in late October and early November and later acted as resistance in late November and early December.

We discussed the breakout on the same day. One thing that stood out at the time was the distance between the current price and the 10 and 20 EMAs. It signaled that a pullback into the 0.7635 area was likely before the next leg higher.

While the AUDUSD did retest 0.7635 as new support, we didn’t get a bullish signal to go long. I know some of you took the trade regardless, and it worked out quite well.

The pair is now hovering just below the 0.7730 resistance handle. This was the first target for the idea I mentioned on December 14. The area served as a pivot between October 6 and November 2. It also played a role in capping the mid-June advance.

A daily close (New York 5 pm EST) above 0.7730 would open the door to the next resistance level at 0.7820. The region was less influential in October, but it is very near the 2016 high, so it’s one worth watching.

Alternatively, bearish price action from 0.7730 would signal a move lower. Just keep in mind that the AUDUSD is bouncing from long-term support that extends from the 2016 low, so any downside movement may be limited. See the December 14 commentary.

Seeing as how we just entered one of the slowest trading weeks of the year (if not the slowest), conditions may warrant a seat on the sideline.

As always, the decision of whether or not to trade is yours. If you do trade this week, though, half or even quarter size positions may not be a bad idea.

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AUDUSD support and resistance on the daily chart

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6 comments
lak says

tnx sir! merry christmas and happy new year!!

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Geniusbami says

Your update is quite timely for me. I took a long position last week, and it’s playing out well. I just want to say that I am looking at how price will react at Fibo levels (measuring from September 07), and your levels are just on point; 0.77390 is the 38.2% and 0.77127 is the 50%.

Good job Justin.

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imi says

Merry Christmas TKS for Your valuable information

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BMHung says

Thanks for your post.

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Zenab says

I took sell positions AUD/usd and in Big minus. Still holding the positions

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    Juniour says

    0.81215 is where we heading Sir

    Reply
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