CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

AUD/USD Retests Key Resistance Zone

By Capital.com News

10:24, 17 November 2023

Any material provided is for information purposes only and is not investment advice. Any opinions that may be provided are not a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided. If you rely on the information on this page then you do so entirely on your own risk.

The US dollar weakened notably following the latest CPI data, showing a larger-than-expected dip to 3.2% in October. This decline, the first in four months, sparked a surge in AUD/USD on Tuesday, pushing prices back into a crucial resistance zone established since August (see daily candle chart below).

Wednesday’s price action saw AUD/USD briefly break above the resistance zone before retreating and closing near intra-day lows. This failure to hold above resistance has formed a bearish fakeout pattern.

AUD/USD Daily Candle Chart

snapshot

Past performance is not a reliable indicator of future results

Switching to the 4-hour candle chart (below) provides a closer look at Wednesday's fakeout at the resistance level, offering more intricate details. This timeframe unveils a subtle yet notable double top reversal pattern, complemented by negative divergence on the RSI. However, we can also see the strength of momentum in Tuesday’s rally, and this should strike caution in AUD/USD bears.

AUD/USD 4hr Candle Chart

BTC/USD

64,776.20 Price
+7.930% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

US100

20,435.50 Price
+0.480% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 1.8

XRP/USD

0.55 Price
+2.430% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

Gold

2,421.39 Price
+0.400% 1D Chg, %
Long position overnight fee -0.0192%
Short position overnight fee 0.0110%
Overnight fee time 21:00 (UTC)
Spread 0.30

snapshot

Past performance is not a reliable indicator of future results

Risk Management:

Traders eyeing a short position on AUD/USD might consider using Wednesday's fakeout highs for stop placement.

Upcoming U.S. Initial Jobless Claims data and U.S. Housing Starts data could potentially heighten volatility in USD currency pairs, influencing AUD/USD movements.

Related topics

Rate this article

Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

Still looking for a broker you can trust?

Join the 630,000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading