Pattern Breakout to the Upside

Kicking things off with a look at the monthly chart, which shows that the Australian dollar (AUD) has been on the front foot versus the US dollar (USD) in August, up +2.6% month to date. Since late 2022, the AUD/USD pairing has carved out a symmetrical triangle between US$0.6170 and US$0.7158, and the pair recently punctured the upper boundary of the coil, signalling a possible reversal to the upside.

Price Testing Daily Support

Price action on the daily chart recently consumed offers at resistance from US$0.6715 and swiftly retested the base as support (check the 5-minute timeframe). Therefore, today’s test of the level and overshooting the line should not surprise. That, however, does not mean the area will not deliver support again and prompt buyers to take aim at resistance from US$0.6803, a major level of resistance.

H1 Support in Play

Meanwhile, short-term price action on the H1 timeframe shows the currency pair testing the grip of US$0.67 the figure. This level is also accompanied by a 1.618% ‘alternate’ AB=CD support base and a neighbouring 38.2% Fibonacci retracement ratio at US$0.6687. At the same time, though, despite the confluence around US$0.67, to test the big figure, the unit had to breach trendline support, extended from the low of US$0.6349, consequently making short-term long positions from US$0.67 challenging. A run lower on the H1 chart would shine a light on support from US$0.6644.

Price Direction?

Undeniably, sentiment favours buyers at the moment. The tentative breakout beyond the upper boundary of a monthly symmetrical triangle and daily and H1 price toying with support areas could, therefore, be enough technical evidence to entice buyers to step in between US$0.6687 and US$0.67.

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