FX.co ★ AUD/USD

Currency pair AUDUSD - D1 chart. Currently, the wave structure is forming a downward pattern. The current downward wave has updated the previous low, the MACD indicator is decreasing in the oversold zone and below its signal line. Nevertheless, the long-awaited descending correction is underway, as warned by the bearish divergence on the MACD indicator being used. Additionally, a bullish wedge reversal pattern can be identified here. The pattern was broken downwards, along with a breach of the horizontal support level at 0.6981, which has now turned into a resistance level. Price returned to test this level, with an expected bounce downwards, but then President Trump intervened with a speech, causing the US dollar to strengthen, leading to a slight decrease from this level. There is a high probability of further decline towards the horizontal support level at 0.6740. However, an alternative scenario to the decline is a rise. It is possible that the bounce downwards after reaching the level at 0.6981 was just a temporary pullback, and a subsequent breakout upwards and consolidation may follow. This would turn the level into a support once again. In this case, it would become clear that a trap has been set for sellers, with all circumstances aligning well for a decline, but instead a rise towards the sellers' stop-loss levels may occur. This possibility cannot be ruled out, so when deciding to go short, it is important not to load up on too much risk. If the expected decline does not materialize and there is a reversal upwards, it is advisable not to wait for the stop-loss to trigger, but to also reverse and go long. The overall trend is still bullish and not yet convincingly broken. To break it, a retracement to form a second wave is needed, followed by a move downwards for the third wave. Selling seems doubtful, especially considering the positions of other currency pairs, particularly the euro, whose movement influences other major pairs. There is a greater inclination for a reversal and a push towards new highs after a decline, as the price previously failed to achieve this. At the moment, I would stay out of the market as the situation seems uncertain.