Australian Dollar Technical Forecast: AUD/USD Snaps Back from .7000
AUD/USD Technical Forecast: Bullish
- AUD/USD jumped above a big zone of resistance in the latter portion of this week.
- Despite a post-RBA sell-off on Tuesday, buyers came in to offer higher-low support and the pair jumped higher for the final three days of the week.
- The analysis contained in article relies on price action and chart formations. To learn more about price action or chart patterns, check out our DailyFX Education section.
It was another strong week for the Australian Dollar and AUD/USD put in its second consecutive week of gains after running into the .7000 big figure in late-September. The key technical item for this week was the pair overtaking a big zone of resistance that had previously kept buyers at bay. This zone, running from .7185-.7205, had held the highs through the first four trading days of October, and after a dip on Tuesday, helped along by the RBA rate decision, it looked as though sellers might be able to take-control and make another push towards the .7000 handle.
But selling pressure quickly evaporated after that Tuesday slump, and buyers returned and prices pushed through that zone on a recurrent attempt, finally taking out that resistance on Friday.
AUD/USD Daily Price Chart
Taking a shorter-term look at the pair and there’s a possibility of bullish continuation given the recent series of higher-highs and higher-lows. In terms of short-term resistance, there’s potential for at least a pause in the move just ahead around the .7250 level; and beyond that prior resistance from .7340 and .7412 come into the picture. If AUD/USD is going to be able to push up to a fresh high, then the pair will need to contend with the .7500 psychological level, which could be considered as a longer-term item of resistance potential.
For short-term support potential – that prior zone of resistance, spanning from around .7185-.7205, could be considered as an attractive area for bulls to look for that next higher-low.
AUD/USD Four-Hour Price Chart
--- Written by James Stanley, Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.