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Market Update: AUDUSD Reversal Starting to Develop?

August 2, 2021
by Joseph Jeffriess, Market Analyst

Hi traders, today we are looking at the daily AUDUSD we can see buyers putting up some fight from a key level. Could this be the start of a new attempt by buyers to snap the current downtrend?

Looking at the chart below we can see today’s move holding after testing support. This support point was formed on the first hold formed in late July. This level has also turned to support after being a previous resistance point.

What makes this pattern more interesting to me is the fact that its history repeating. If we look back to September – October 2020, we can see a resistance point that became support and ended up turning into a longer-term rally.

I’m not saying that’s the guaranteed outcome here just because it happened in 2020. But the signs are there and markets do have a history of repeating price based patterns.

Daily AUDUSD Chart

Looking forward we have to see current support hold. A break below support changes the dynamic and could suggest the current downtrend will continue further. If buyers can continue to hold support and USD dynamics continue to fade this could produce a new rally. Iron ore is another factor as prices of the metal are continuing to decline sharply off their 2021 highs.

All times are AEDT.