The AUD/USD pair has recently shown signs of reversing its short-term downtrend and establishing a new uptrend. After bouncing off the lows on August 5, the pair has continued to move higher and could potentially see further gains up to the 200-period SMA in the 0.6630 range.
The reversal of the short-term downtrend was confirmed by the formation of a Japanese Hammer candlestick pattern on both the 4-hour and daily charts. This pattern often signals a change in direction and in this case, indicated the beginning of a new uptrend for the pair.
On the 4-hour chart, AUD/USD has started to form a series of rising peaks and troughs, which is a clear indication of the formation of a new short-term uptrend. With the trend currently biased to the upside, there is a strong possibility that the pair will continue to move higher in the near future.
A key resistance level to watch for is at 0.6605, the high reached on August 9. A break above this level would provide further confirmation of a continuation higher, with a target set at around 0.6639, the level of the 200-period SMA and 50-day SMA. It is expected that these major SMAs will act as a barrier to further gains, at least in the short term.
Technical indicators such as the 50 and 100-SMAs have already been broken by AUD/USD, signaling strong bullish momentum. Additionally, the Relative Strength Index (RSI) is not yet in overbought territory, indicating that there is still room for further upside potential.
In conclusion, the AUD/USD pair has shown strong signs of reversing its short-term downtrend and establishing a new uptrend. With key resistance levels to watch for and technical indicators pointing towards further upside potential, traders may consider looking for buying opportunities in the pair in the near future.
