Introduction
The Aussy Dollar has been gaining grind like most other currencies as the US Dollar has been weakening.
Key Technical Observations:
Resistance Level: The price faces strong resistance around the 0.6812 level. This level has been tested multiple times and is holding, suggesting that the bulls are struggling to break through this barrier.
Pivot Points: The price is hovering around the R1 (0.67465) resistance level, and this level is critical as it often acts as a strong resistance point. A failure to close above this level with strong momentum could indicate a potential reversal.
The 50-day moving average (in red) is around 0.66715.
The 200-day moving average (in blue) is around 0.66321.
The price is currently above both moving averages, but if the resistance holds and the price reverses, these moving averages could act as initial support levels. A breach below these levels could intensify the bearish momentum.
Recent Price Action: The recent candles are showing small bodies with wicks on both sides, indicating indecision in the market. This often precedes a reversal, especially when it occurs near a resistance level.
Bearish/Short High-Probability Trade Setup:
- Entry Point: A short position could be considered if the price fails to break and close above the 0.6812 resistance level. Confirmation of a reversal would be ideal, such as a bearish candlestick pattern (e.g., a bearish engulfing pattern) forming at this resistance level.
- Initial Target: The first target would be the 50-day moving average around 0.66715, followed by the 200-day moving average at 0.66321. These levels are likely to provide some support, but if broken, further downside could be expected.
- Extended Targets: If the price breaks below the 200-day moving average, the next potential support levels are around the pivot point (0.66170) and then S1 (0.64230). These would be subsequent targets for a short position.
- Stop Loss: To manage risk, a stop loss should be placed just above the recent highs, slightly above 0.6815, to avoid getting stopped out on a potential false breakout.
