FX.co ★ AUD/USD

Hello traders, The currency pair AUDUSD - D1 chart. The current downward wave has updated the previous low, the MACD indicator is decreasing in the oversold zone and below its signal line. Nevertheless, there is a correction of the long-awaited descending correction that was 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 the horizontal support level at 0.6981 being breached, which has now turned into a resistance level. There is a high probability of further decline towards the horizontal support level at 0.6740. The CCI indicator is ready to move upwards from the oversold zone, indicating a likelihood of some upward movement and a test of the 0.6981 level. At this level, transitioning to a lower timeframe within the day, one can look for a selling formation. The same mirror level is where support turns into resistance. However, there is also an alternative scenario to the decline - growth. Perhaps after reaching the 0.6981 level, there will only be a downward bounce, followed by a breakout upwards and consolidation. This would make it a mirror level again, turning into support. In this case, it will become clear that there is a trap for sellers, as all circumstances are favorable for a decline, but a rise towards sellers' stops for a maximum could occur. This possibility cannot be ruled out, so when approaching 0.6981, it is risky to load up, and if there is no decline and a reversal upwards occurs, do not wait for a stop, but also reverse and go long. Nevertheless, the overall trend is still upward and not properly broken. To break, a pullback to the second wave must occur, followed by a move downwards to the third wave. If we look at a higher weekly period, it is evident that the price previously reached the 161.8 level according to the Fibonacci target grid applied to the first wave. Since the 161.8 level has been reached and there was a bearish divergence on the daily MACD, there was a high probability of a corrective decline, which has already taken place and there is potential for further movement.