The AUD/USD currency pair has shown signs of life with an initial bounce, finding support around the 0.6360 mark, which corresponds to a multi-month descending trendline connecting lows from March and May. While this bounce offers a glimmer of hope for Aussie bulls, analysts at Société Générale suggest that caution is still warranted as a significant upward move is not yet in clear sight.
The critical level to watch for AUD/USD is 0.6525, which has recently acted as a pivot high. If the pair fails to surmount this level, it could trigger renewed selling pressure. In essence, 0.6525 serves as the first layer of resistance in the short term, and its significance cannot be overstated.
Should AUD/USD remain below 0.6525, the risk of another downward leg becomes a real possibility. In such a scenario, traders should prepare for potential support levels located at projections, as well as the October 2022 low, falling in the range of 0.6200 to 0.6170.
In essence, the currency pair finds itself at a critical juncture, with the potential for both bullish and bearish outcomes. The recent bounce from 0.6360 indicates some resilience, but the path forward hinges on whether AUD/USD can break through the formidable 0.6525 resistance. Traders and investors should closely monitor price action around this level, as it could dictate the pair's near-term trajectory.
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