The AUDUSD pair is currently trading near a critical technical zone on the 4-hour timeframe. Price action suggests that the market is approaching a decision point where traders may soon see either a rejection from resistance or a confirmed bullish breakout. This analysis focuses on market structure, trendlines, and moving averages to outline possible trading scenarios.
Market Structure Overview
Since September, AUDUSD has been moving inside a descending channel, characterized by lower highs and lower lows. This structure indicates a medium-term bearish bias, despite short-term bullish pullbacks.
Recently, price rebounded from the lower boundary of the channel and rallied toward the upper descending resistance, which has historically acted as a strong supply zone. Such areas often attract sellers, making this level important for upcoming price action.
Indicator Analysis
Simple Moving Averages (SMA 9 & SMA 20)
- The 9-period and 20-period SMAs are moving close to each other, signaling market indecision.
- Price is hovering around these averages, which often precedes volatility expansion.
- A rejection below the SMAs could confirm bearish continuation, while sustained trading above them would support bullish momentum.
Key Support and Resistance Levels
| Level Type | Price Zone |
|---|---|
| Major Resistance | 0.6620 – 0.6650 |
| Immediate Support | 0.6500 |
| Next Support | 0.6400 |
| Breakdown Target | 0.6300 |
The 0.6620–0.6650 zone aligns with the descending channel resistance, increasing its technical importance.
Trade Scenarios
🔴 Bearish Scenario (Higher Probability)
If AUDUSD shows rejection signals such as long upper wicks, bearish engulfing candles, or weak closes near resistance, a short trade setup may form.
Potential targets:
- First target: 0.6500
- Second target: 0.6400
This scenario aligns with the prevailing downward channel structure.
🟢 Bullish Scenario (Alternative)
A strong 4H candle close above 0.6650 with follow-through buying could invalidate the descending channel.
Upside targets:
- 0.6750
- 0.6800
In this case, traders should watch for pullback confirmations before entering long positions.
Trading Strategy & Risk Management
- Wait for clear confirmation before entering trades
- Avoid entering positions directly at resistance without price action signals
- Use proper stop-loss placement beyond key levels
- Risk only a small percentage of trading capital per trade
Conclusion
AUDUSD is currently at a make-or-break zone on the 4-hour chart. While the broader structure favors bears, a confirmed breakout could shift momentum bullish. Traders should stay patient and let the market confirm its next direction.
Disclaimer: This analysis is for educational purposes only and not financial advice. Always do your own research before trading.
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