Australian Dollar Technical Forecast
- AUD/USD may turn lower after resistance held multiple times
- GBP/AUD medium-term outlook bearish on reversal pattern
- AUD/JPY faces a similar fate, may turn lower after brief rise
In this week’s poll, the top two requested Australian Dollar pairs for this technical forecast were GBP/AUD and AUD/JPY. Follow my Twitter account here @ddubrovskyFX for the opportunity to participate in each week’s vote. There, I will also be offering timely updates on the Aussie Dollar.
AUD/USD Technical Outlook: Bearish
AUD/USD is still undermined by a head and shoulders pattern that, in the medium-term, signals a bearish outlook. This past week, the Australian Dollar enjoyed cautious gains against its US counterpart, as anticipated in the previous outlook. But, it was not enough to clear a stubborn resistance area at 0.7098 which failed to be breached three times this past week.
This area also closely aligns with a descending trend line from January (middle dashed red line on the chart below). AUD/USD’s struggle to clear resistance warns that it may run out of steam and turn lower ahead. Even if that is the case, it needs to break a support range between 0.6981 and 0.7021 thereafter to resume the dominant downtrend that began back in the beginning of 2018.
AUD/USD Daily Chart
GBP/AUD Technical Outlook: Bearish
GBP/AUD struggled this past week to maintain its breach above critical resistance at 1.8732. This area is important as key resistance barriers beyond it don’t appear to kick in until 1.9031. Sustaining upside momentum is proving difficult, not least thanks to a clouded fundamental outlook due to the ongoing Brexit saga. But technically speaking, negative RSI divergence warns that a turn lower may be in the cards.
Furthermore, a rising wedge reversal formation has been cooking since February. If this pattern holds true, the medium-term technical outlook for GBP/AUD risks being bearish. But, until the floor of the pattern is broken, this candlestick formation may continue brewing. As such, it may even be possible that the British Pound continues gaining. In that circumstance, watch the upper line of the rising wedge.
Looking for a fundamental perspective on the AUD? Check out the Weekly AUD Fundamental Forecast.
GBP/AUD Daily Chart
AUD/JPY Technical Outlook: Bearish
After the break under the floor of the ascending triangle, the AUD/JPY technical outlook turned increasingly bearish and remains the case going forward. While there has been a slight recovery in the pair this past week, a new descending resistance line from February 25 halted further upside progress. The failure to breach it also left a shooting star candlestick, which is a sign of indecision. A turn lower has support next at 77.49.
AUD/JPY Daily Chart
* Charts created in TradingView
FX Trading Resources
- Having trouble with your strategy? Here’s the #1 mistake that traders make
- See how the Australian Dollar is viewed by the trading community at the DailyFX Sentiment Page
- Just getting started? See our beginners’ guide for FX traders
--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter