AUD/USD Retest the Strong Support Level, Oil Price Recovering

Key Highlights

  • AUD/USD declined sharply and tested the 0.6860 support zone.
  • A key bearish trend line is forming with resistance near 0.6965 on the 4-hours chart.
  • Crude oil price found support near $87.20 and recovered above $92.00.
  • The US Manufacturing PMI declined from 52.2 to 51.3 in August 2022 (Preliminary).

AUD/USD Technical Analysis

The Aussie Dollar started a major decline from well above 0.7100 against the US Dollar. AUD/USD traded below the 0.7000 support zone to move into a bearish zone.

The 100 simple moving average (red, 4-hours) and the 200 simple moving average are all below the pair’s important 0.7000 support level. Below the 0.6920 support region, the drop accelerated.

Nevertheless, the bulls were active close to a significant support at 0.6860. The pair has made a low near 0.6858 and is currently consolidating its losses.

A small upward movement occurred above the crucial fall level from the 0.7136 swing high to 0.6858 low, which is the 23.6% Fib retracement level. The pair is seeing resistance near the 0.6965 level on the upswing.

On the same chart, a significant negative trend line with resistance close to 0.6965 is also developing. The 0.7000 level represents the next significant resistance. It is close to where the main slide from the 0.7136 swing high to 0.6858 low 50% Fib retracement. 

The pair may advance higher toward the 0.7120 level if there is a clear move above the 0.7000 barrier. In the absence of an upward breakout, the pair may resume falling below the 0.6900 mark.

The 0.6860 zone is the next significant support, below which the bears can gain momentum. In the aforementioned scenario, the pair may perhaps decrease in the ensuing days near the level of 0.6720.

When looking at the price of crude oil, there was significant buying interest around the $87.20 region, and the price was able to rise above $90.00. However, there is still a sizable obstacle close to the $95.00 mark.

Economic News to Trade Today

  • US Durable Goods Orders for July 2022: Forecast +0.6% vs. +2% Previous
  • The US Pending Home Sales in February 2022 (YoY): -4.0%, down from -8.6% in the prior month.
Author:
Amogo Solomon is a Broker-Dealer/Market Research analyst and writer in ACT Brokers with a background in Computer Science, Data Analytics, and Forex Broker Dealing. He specializes in Forex Dealing, markets Analysis, Currency research, forex fundamental and technical analysis, and Monitoring of Forex trends, Stocks, Equities, Cryptos, and Commodities. He possesses strong technical and analytical skills and is well known for his entertaining and informative analysis of the global economy, fiat currency, commodities, Stocks, Indexes, Futures, and Options markets. He held a Bachelor's degree in Computer Science and Nanodegree in Programming for Data Science Enterprise.

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