For a couple of weeks now, the 0.6800 level has been a big one for the Aussie.

So far price has been holding below that point, but technically speaking, it looks like price wants to really test that level.

As we know, price gets sucked towards these key round number levels and the bigger the level, the more price wants to re-test them.

The AUD/USD has been incredibly soft since the Chinese devalued the Yuan which led to a big sell-off in risk assets. Prior to that we also had the RBA cutting rates on two occasions, so for the time being it is tricky to make a bull case on a fundamental level.

Don’t get me wrong, I’m bearish, but I am very interested when price starts coiling under a level.

To me, that’s a sign of buyers sitting in the wings and just bidding it up on each pullback. When that happens we get higher lows as they sit ready and waiting to try and push price through a level.

Now that sort of price action doesn’t mean price will hold the break, but we can use it to set up a good risk-reward for a break out play.

So we can risk of the most recent low at 0.6750-60 and look for a break of the highs. If price drops that 0.6750 level then it is safe to assume the bears win. But if it runs we could see a sharp pop though.

My prefered play here would be to trade the break to the downside to go with the longer-term momentum, but this is just something to keep an eye on.