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Australian Dollar Technical Forecast: AUD/USD, AUD/CAD, AUD/JPY Chart Setups

Australian Dollar Technical Forecast: AUD/USD, AUD/CAD, AUD/JPY Chart Setups

Thomas Westwater, Analyst

Australian Dollar Technical Forecast

  • AUD/USD at decisive level with breakdown potential near H&S neckline, 100-day SMA
  • AUD/CAD Falling Wedge will likely dictate next week’s price action, with a bearish bias
  • AUD/JPY may shift higher in the near term, but a bearish RSI divergence may limit gains
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AUD/USD Technical Price Forecast: Slightly Bearish

AUD/USD finds itself in a decisive position after dropping nearly 1.50% last week to test the neckline of a Head and Shoulders pattern. For now, neckline support remains in place after helping to underpin prices following a sharp drop earlier in the week from the pattern’s right shoulder. While support held and may continue to do so, the bias appears skewed to the bearish side.

Along with neckline support, prices are gyrating near the 0.76 psychological level and the 100-day Simple Moving Average, which likely bolstered the neckline’s support through a confluent effect of layered support. That said, a break below this confluent support would likely see a sharp selloff, perhaps to the next level of support appearing at 0.7517.

AUD/USD Daily Chart

AUDUSD Price Chart

Chart created with TradingView

AUD/CAD Technical Price Forecast: Bearish

The Australian Dollar’s breakdown against the Canadian Dollar has pushed AUD/CAD lower since its February swing high. Price action has formed a Falling Wedge pattern, and while is in itself bullish, prices may continue lower until a break above the pattern’s upper limit occurs.

Another notable event in price action occurred last week, with a break below the 200-day Simple Moving Average (SMA). The currency pair subsequently moved higher near the end of the week and now sits nearly square with the major SMA. Moreover, current action lies with an area of price congestion from the November-December range. All things considered, the wedge’s upper and lower limits will be key to watch.

AUD/CAD 8-Hour Chart

AUD/CAD Chart

Chart created with TradingView

AUD/JPY Technical Price Forecast: Slightly Bullish

The Australian Dollar shifted lower against the safe-haven Japanese Yen last week, extending losses from the prior week when AUD/JPY pinged trendline resistance from November before moving lower. That swing high signaled a loss of momentum, evidenced by a bearish divergence in the Relative Strength Index (RSI) against the February swing high.

AUD/JPY may shift higher in the near-term, with the MACD line crossing over its signal line on the 8-hour time frame. A failure to record a new high on the next leg would likely confirm the breakdown in broader momentum, as shown in the RSI divergence. Overall, however, prices may shift higher in the coming week. The 38.2% or 23.6% Fibonacci retracement levels may provide resistance points.

AUD/JPY 8-Hour Chart

AUD/JPY chart

Chart created with TradingView

Australian Dollar TRADING RESOURCES

--- Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwater on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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