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Will the AUD/USD’s Downward Trend Continue?

July 21, 2021

  • AUD/USD on a bearish path  after breaking support at 0.7400.
  • Bearish trend line has formed, offering resistance close to 0.7410.

The Aussie Dollar, US Dollar pair has been on a steady decline since it was last above 0.7500. AUD/USD broke the 0.7400 support level and has continued to move further into a bearish zone.

 

AUD/USD 4-Hour Chart (Trend: BEARISH)

On the 4-hour chart, the pair’s bearish momentum picked up after dropping below 0.7400 and 0.7380. The quote has since remained well below the 0.7400 level, the 100-MA (red), and the 200-MA (blue).

The quote will likely encounter resistance near the 0.7355 level. This is close to the 23.6% Fibonacci retracement level for the recent downturn from a swing high of 0.7503 to a swing low of 0.7299.

A significant resistance level is now forming near the 0.7400 zone,which is also near the 50% Fibonacci retracement level. The key bearish trend line which has formed, offers further resistance near the 0.7410 level in the same timeframe.

For a recovery to become possible, the quote must break and settle above the 0.7400 zone. More likely however, the pair will continue to move down below the 0.7300 level, with the next major support being near to 0.7250.

 

 

 

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