Technical analysis AUDUSD: correction or continuation of the trend?

The AUDUSD currency pair was in an increasing trend for 18 days. Yesterday was formed the doji-candel on daily chart. This morning, the pair could not update the high of yesterday at 0.78750 and fell to support at a value of 78.350. The minimum value shown today is 0.78268. What is the peculiarity of the situation. Let’s look at the daily chart.

Analysis AUDUSD Daily-080118It is in the support area at the value of 0.78330 that the principal level passes, which was the maximum of the pair from May 2015 to July 2017, i.e. more than 2 years.

Throughout the second half of today, the pair is trading around support levels.

Analysis AUDUSDM5-080118

The yellow line is just the key level of 0.78330, green is yesterday’s low at 0.78350. Short-term resistance passes at a value of 0.78425. An additional resistance is the moving average for 100 hours (red on the M5 chart). If buyers can overcome this resistance, we can see movement to yesterday’s high. If the pair fade below support at 0.78330, correction is likely to follow. The goals of bulls on the daily chart are the level of 0.80650, the targets of the bears in case of correction level 0.77500 and further – the long-term trend line (blue on the daily chart).

In addition, it is necessary to cancel that the dollar index (USDX) has drawn today a reversal pattern and this will exert additional pressure on bulls on the Australian dollar.

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