The AUD/USD is heavily affected by the US-China trade tensions and so despite the recent rally we have seen, we expect a negative comment due shortly.
The break of the trend line signifies a slowing of the down trend but it would need to create a higher low before confirming the trend is over.
We are currently at resistance at 0.7300 and given the overbought nature of the slow stochastic, we should expect the market to hold here and test the lows at 0.70385.
The fact that the last two times the slow stochastic was overbought, it lines up with the market holding at resistance, also signifies that this market should begin ranging from here, potentially between the 0.7300 and the 0.7000 levels. Remember, sideways markets aren’t as predictable as trending markets and often see traders chopped up.
Should we see a break of the 0.7300 resistance, the next level is 0.74585. That has proven a major area for the market to hold in the past, for that to break this week we would need to see some help from the US and China in their trade relations.
On a daily chart AUD/USD, despite recent upturn in fortunes, expectation is still with the major trend and for this market to continue lower.
Keep it simple, go with the trend.
Resistance Levels: 0.7305 & 0.7458
Support Level: 0.7038
Disclaimer: This should not be used as investment advice and is only an opinion. Do your own research before looking to risk your own capital in the financial markets.