The Aussi continues to slide a bit during the trading session on Wednesday as traders come back to work since Monday. The AUD/USD pair dropped from the highest wave of 0.7223 to set above the major support of 0.7079.
However, the 0.7079 level has been supported in the past, so it would make sense that we would see a little bit of hesitation to break below it.
But, the AUD/USD pair analysis over the medium term is showing a coming rally towards the 0.7172 resistance area.
The daily time frame continues to show that the pair is enclosed inside a expanding ascending wedge pattern between the 0.7079 and 0.7223 levels.
It noted that the market is not stable because we are seeing a movement between the levels of 0.7223 and 0.7079 since yesterday. Today, some strong news on the U.S Dollar such as : Crude Oil Inventories, ISM Non-Manf, Trade Balance and ADP Non-Farm Employment Change, So be careful to start any deal.
Overly, the analysis shows that a bullish inverted head-and-shoulders pattern will form if the price reaches the 0.7135 - 0.7172 area.
The AUD/USD pair will be probably continued to trade in a bullish trend from the support levels of 0.7079 and 0.7047.
Currently, the price is in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market (above 30). As the price is still above the moving average (100), immediate support is seen at 0.7079, which coincides with a ratio (38.2% of Fibonacci).
Consequently, the first support is set at the level of 0.7079. Hence, the market is likely to show signs of a bullish trend around the spot of 0.7079.
In other words, buy orders are recommended above the ratio (0.7079) with the first target at the level of 0.7172. Furthermore, if the trend is able to breakout through the first resistance level of 0.7172. We should see the pair climbing towards the double top (0.7223) to test it.
Therefore, strong double top will be formed at the level of 0.7223 providing a clear signal to buy again with the targets seen at 0.7280. Thus, the pair will move upwards continuing the development of the bullish trend to the level 0.7280 in order to test the daily resistance 3.
It would also be wise to consider where to place a stop loss; this should be set below the second support of 0.6992.
