Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
Today’s price action is shaping up to be an impressive recovery from AUDUSD bulls.
Although we still have one hour left in today’s session, buyers have reclaimed the 0.6750 area on a 4-hour closing basis.
This 0.6750 region was our target following the July 25th breakdown.
As you can see, 0.6750 is the location of descending channel support as well as a horizontal level that supported the pair earlier this year.
Today’s recovery is why I don’t sell downside breaks of descending levels.
Even if AUDUSD had closed today below 0.6750, I wouldn’t want to entertain a short given the descending nature of this channel.
If we do see the pair close back above 0.6750 today, however, I will begin watching for a break above today’s high at 0.6782.
I’m going to require more from AUDUSD bulls than I otherwise would given the longer-term downtrend here.
I don’t want to buy into that without some form of confirmation.
A break above Wednesday’s high would be the first higher high since AUDUSD started its descent on July 19th.
It would also expose that 0.6830 resistance area I mentioned on the 6th.
But until we see buyers carve a higher high, I’ll remain on the sideline.