Introduction: The AUD/USD currency pair has been trading within a 100 pip box between 0.6900 and 0.7000, with the bears struggling to gain conviction. The recent moves towards the neckline were faded quickly, creating a pool of liquidity for the bulls to make their move. Despite the lack of a breakdown of structure to the downside, a bullish thesis can still be valid for the opening balance of the week.
Hourly Chart Analysis: On the hourly chart, the bullish thesis can be solidified by clearing the 0.6950 resistance level. The opening range on Monday will be a crucial factor in determining the next move for the pair. However, as long as the pair holds above the trendline and support, there is a prospect of a short squeeze to test the 0.6950 level in the day ahead. This does not rule out the possibility of the pair moving into the 0.6880s before testing the resistance level.
Bears Struggle for Conviction: The bears have been struggling to gain conviction in their downward movement of the AUD/USD currency pair. The lack of a breakdown of structure to the downside below the 0.6920/00 support level is a significant indicator of their struggle. Moreover, the quick fading of the recent moves towards the neckline is further proof of the bears’ inability to create sustained momentum to the downside.
Bulls Wait for Their Chance: On the other hand, the bulls are waiting for their chance to make a significant move upwards. The initial tests have created a pool of liquidity, which may enable them to make a strong move towards the 0.6950 resistance level. The lack of a breakdown of structure to the downside also leaves the door open for a bullish thesis to be valid for the opening balance of the week.
Prospects of a Short Squeeze: As the pair holds above the trendline and support, there is a prospect of a short squeeze to test the 0.6950 level. This could be a significant move for the bulls, as it would solidify the bullish thesis and potentially open the door for further upward momentum. However, it is essential to note that the pair may move into the low-hanging fruit below 0.6900 before testing the resistance level.
Conclusion:
The AUD/USD currency pair is currently trading within a 100 pip box between 0.6900 and 0.7000, with the bears struggling to gain conviction. The lack of a breakdown of structure to the downside and the quick fading of recent moves towards the neckline creates a strong case for a bullish thesis to be valid for the opening balance of the week. The prospects of a short squeeze to test the 0.6950 level could be a significant move for the bulls, potentially opening the door for further upward momentum. However, it is important to note that the pair may move into the low-hanging fruit below 0.6900 before testing the resistance level.
