Chart: AUD/USD finds support from a long-term trend line!

Australian dollar buyers can brace for action after a brief dip.

Do you think AUD/USD is ready to extend its uptrend of several weeks?

Let’s take a closer look at the 4-hour chart!

AUD/USD 4 Hour Forex Chart from TradingView

Risk assets such as the Australian dollar fell yesterday after a lack of fresh catalysts encouraged some traders to second-guess China’s latest monetary stimulus and price in their concerns about global growth.

The US dollar, on the other hand, had a good Wednesday despite a light calendar of US data. The greenback pared some of its weekly losses ahead of Thursday’s FOMC members’ speeches and Friday’s US PCE price index report.

Remember that directional biases and market price volatility conditions are usually driven by fundamentals. Let’s say you haven’t done your US and Australian dollar homework yet, then it’s time to check the economic calendar and stay up to date with the daily fundamental news!

Will the dollar extend its gains against the Aussie?

AUD/USD, which has been rejected from the psychological handle of .6900, could find support from the previous resistance levels of .6825. As you can see, the broken resistance area lines up with the 38.2% Fibonacci retracement levels and is not too far from the Pivot Point line (.6780) of the 4-hour chart.

More importantly, AUD/USD is near a trendline support that has existed since the second week of September.

Watch for sustained trading above .6850, which could lift AUD/USD for a retest of previous highs of .6900. And if fundamentals provide a bullish boost for the AUD, we could see AUD/USD hitting new monthly highs near .7000.

However, other bearish moves are not off the table.

Sustained trading below the trendline and .6800 support area could see AUD/USD decline to lower inflection points. In this case, we are looking for a potential downside to the .6725 – .6750 levels near the S1 pivot point (.6721) and the 100 and 200 SMAs.

Remember to practice proper risk management and be aware of top market catalysts when trading it. Good luck and happy trading, wrong!