Any Dip in AUDUSD Could Now be a Buying Opportunity

On short-term chart AUDUSD has been trending higher within an ascending trend-channel formation. Moreover, the pair is now trading above 200-day SMA for the first time since Sept. 2014 and has also cleared a short-term descending trend-line hurdle near 0.7200 round figure mark. The combination of these bullish incidences clearly point towards extension of the pair’s upward trajectory in the near-term.

The expectation of near-term bullish momentum would further get confirmed once the pair decisively breaks through the upper trend-line resistance of the channel, currently near 0.7255-60 area. Sustained strength above the ascending trend-channel resistance should assist the pair in reclaiming 0.7300 mark and lift it towards testing Oct. & Dec. 2015 highs resistance near 0.7380-85 region.

On the downside, the descending trend-line resistance break-point (0.7200 mark) followed by 200-day SMA (near 0.7180 region) might now protect immediate downside. Momentum below 0.7200 mark, leading to a subsequent break below 200-day SMA, has the potential to drag the pair back towards testing the lower trend-line support of the ascending channel, which currently stands near 0.7125 level. However, considering the bullish set-ups on short-term chart, weakness below 0.7200 mark should be utilised to initiate fresh long positions.

Short-term traders should place stop-loss below 200-day SMA support (near 0.7180 level) while positional traders would liquidate their positions only if the pair fails to hold the trend-channel support near 0.7125 region.