AUDUSD Breaks the Upper Bound of a Downside Channel

#OPINIONLEADER#

AUDUSD traded higher on Tuesday, after hitting support near the 0.6860 zone, with the advance taking the pair above 0.6900, thereby confirming a higher high on the 4-hour chart. Of more importance though, is yesterday’s break above the upper bound of the downside channel that had been containing the price action since August 10. All this suggests that the short-term picture may have turned to somewhat positive for now.

The RSI and the MACD oscillators detect strong upside speed, supporting the narrative for further advances. The former is approaching its 70 line, still pointing up, while the latter remains above both its zero and trigger lines.

The break above 0.6900 may have invited more bulls into the game, who could initially aim for the 0.6955 barrier, marked by the high of August 30. If they don’t stop there, they could continue up to the 0.6990 zone, the break of which could carry extensions towards the 0.7040 hurdle, defined as a resistance by the high of August 16.

On the downside, a break back below 0.6825 may confirm the pair’s return within the aforementioned channel and could allow declines to the 0.6773 obstacle, marked by the inside swing high of September 8. Should the bulls stay indifferent near that zone as well, then the tumble may extend towards the 0.6718 or 0.6700 barriers, defined as support levels by the lows of September 8 and 7 respectively.

Putting everything in a nutshell, AUDUSD has broken above the upper bound of a downside channel yesterday, and today, it confirmed a higher high on the 4-hour chart. From a technical standpoint, this implies that the bulls are in the driver’s seat for now.