**The AUD/USD Pair Slides Lower After Encountering Resistance: A Comprehensive Technical Analysis**
_Original reporting credited to Adam Button, ForexLive_
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The Australian Dollar versus the US Dollar (AUD/USD) experienced a notable downturn in trading today following a period of bullish momentum that saw it approach a crucial resistance zone. This shift comes after several days of moderate gains, prompting traders to reevaluate their short-term outlook on the currency pair.
This report delves deep into the price action, technical developments, broader economic factors, and what traders might expect going forward, drawing extensively from Adam Button’s coverage on ForexLive and supplementing with additional market insights.
## Overview of Recent AUD/USD Price Action
– **Initial rally**: AUD/USD began the current week with a series of gains, propelled by risk-on sentiment and some softness in the US dollar.
– **Approaching Resistance**: As the pair approached a significant resistance level, buyers weakened and sellers took the upper hand, causing the currency pair to retrace a portion of its recent gains.
### Intraday Movements
– In European trading hours, AUD/USD made sustained moves upward, closing the distance to its next technical ceiling.
– Resistance in the region of 0.6700-0.6710, a pivotal zone that had acted as a cap for previous rallies, was closely watched.
– Sellers emerged at this resistance, halting momentum and sending the pair lower on the day.
– By the New York session, AUD/USD had retraced below the 0.6680 support region, seen as a near-term pivot.
#### Chart Analysis
– The daily chart shows the pair printing a bearish reversal candlestick at resistance, suggestive of waning bullish momentum.
– Short-term support levels are now in focus, notably around 0.6645-0.6650, an area where previous dips had found buyers.
## Technical Factors Influencing the Correction
### Key Resistance and Support Levels
– **Resistance**: The 0.6700-0.6710 range corresponds to:
– Previous swing highs in late May and early June
– The confluence of a descending trendline that has capped price action since late 2023
– Fibonacci retracement levels (commonly 61.8 percent from the April swing high to May low)
– **Support**: On the downside, traders are monitoring zones around:
– 0.6650: A recent breakout level that had flipped from resistance to support
– 0.6610-0.6620: A cluster of moving averages, acting as dynamic support
### Technical Indicators
– **Relative Strength Index (RSI)**: On the 4-hour and daily timeframes, the RSI peaked near the overbought boundary before turning lower, signaling a potential exhaustion of buying pressure.
– **Moving Averages**:
– The 21-period Exponential Moving Average (EMA) on the 4-hour
Read more on AUD/USD trading.