AUDUSD bulls are staging their fifth breakout, hoping to be more successful this time around and to finally break the rectangle that has been dominating the price action since February 24, 2023.
The overall technical picture is positive for the bulls. The RSI has jumped above its 50-midpoint, and it is now trying to make a higher high. More importantly, the stochastic oscillator has broken above its moving average and it is now moving higher in a vertical fashion. If we add to this mix the rare simple moving averages’ (SMAs) convergence, then the bulls might be inspired to record a decisive upleg.
The first resistance stands at the November 15, 2022 high at 0.6797, which is unlikely to trouble the bulls much. The February 2, 2023 downward sloping trendline would then come next and its importance should not be understated as the mid-June advance halted at this trendline. Even higher, the 50% Fibonacci retracement level of the April 5, 2022 – October 13, 2022 downtrend at 0.6815 could be important for a sentiment-perspective.
On the other hand, the bears are anxiously trying to limit the current move but only the Average Directional Movement Index (ADX) is on their side as it continues to signal a range-trading market. They are keen on pushing AUDUSD back inside the aforementioned rectangle and then try to stage a sell-off towards the 38.2% Fibonacci retracement at 0.6739. Even lower, the bears would then come up against the busier 0.6680-0.6712 range, defined by the various SMAs employed here.
To sum up, another bullish AUDUSD breakout is taking place with the bulls feeling very confident. However, key levels have to be broken to avoid talk of another false breakout.
