The AUDUSD pair has recently broken above a long-standing sideways pattern, marking a significant bullish development in the market. This breakout has propelled the price to its highest level since January 2024, indicating a strong bullish momentum behind the pair.
Resistance Levels and Potential Targets
With the pair trading at a six-month high, the next key resistance level to watch is the December 2023 peak of 0.6870. Beyond that, the double top region of 0.6898, last seen in the summer, could also act as a significant barrier for further upside momentum. The psychological level of 0.7000 might also come into play if the pair continues its upward trajectory.
On the downside, immediate support is likely to be found at the May resistance level of 0.6713. A breach of this level could signal a reversion back to the neutral structure, with the April-May resistance turned support level of 0.6643 coming into play. Further declines may find support at the June support level of 0.6618.
While the AUDUSD pair has shown strong bullish momentum following the breakout, there is a growing risk of an impending pullback. Both the Relative Strength Index (RSI) and Stochastics are signaling overbought conditions, suggesting that the advance may be overstretched and due for a correction.
Overall, the AUDUSD pair’s breakout above its neutral structure has sparked renewed bullish momentum, driving the price to new highs. However, traders should be cautious of a potential pullback as the indicators are showing signs of exhaustion in the current rally. Keeping a close eye on key support and resistance levels will be crucial in navigating the market in the coming sessions.