On the daily chart below for the AUDUSD, we can see that the price has failed again to break above the 0.6781 resistance where we have also the 38.2% Fibonacci retracement level. The last failure came as the US Retail Sales missed expectations across the board giving the market recessionary vibes and sending the price lower.
This double failure may turn into a double top within a correction, which is a nice bearish setup for the sellers. Last Friday’s US PMIs beat forecasts but failed to lift the risk sentiment as the market is increasingly worried about the rise in Jobless Claims and new lows in the regional PMIs.
AUDUSD technical analysis
On the 4 hour chart below, we can see that the market has been ranging for quite some time. Such choppy markets are the worst for traders. The levels are defined though with the support at 0.6620 and the resistance at 0.6790.
The best strategy is generally to sit out and wait for a breakout accompanied by a clear fundamental catalyst. While traders can also “play the range” buying at support and selling at resistance, this is generally a more risky and often hard to implement strategy.
On the 1 hour chart below, we can see that the price is now targeting the bottom of the range. At the moment there isn’t much to do for traders as there is no strong level to lean on. The next key level will be the 0.6620 support where the buyers are likely to pile in with defined risk below the range and the top of the range as target.
The sellers, on the other hand, will want to see a breakout before jumping onboard and target first the low at 0.6563 and then a new lower low.
