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Australian Dollar Technical Analysis: AUD/USD, AUD/JPY, AUD/CAD

Australian Dollar Technical Analysis: AUD/USD, AUD/JPY, AUD/CAD

James Stanley, Senior Strategist

AUD/USD Technical Forecast: Neutral

  • AUD/USD remained in range this week, even as USD-weakness came back very visibly.
  • AUD/JPY may be more accommodative for Aussie bulls while AUD/CAD could possibly be more attractive for Aussie bears.
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The major pair of AUD/USD continues to show range-bound, mean-reverting qualities; but elsewhere trends of interest have shown up in the cross-pairs of AUD/JPY and AUD/CAD.

In AUD/USD, the week started with some excitement as the pair pushed up to a fresh two-month-high. But, a big part of this move was USD-weakness that saw many major pairs lift to a greater degree; and after resistance played-through on Tuesday and Wednesday, AUD/USD found itself back in the same range that’s been in-play since early-March.

AUD/USD Four-Hour Price Chart

AUD/USD Chart

Chart prepared by James Stanley; AUDUSD on Tradingview

The Big Fig Looms Ominously

AUD/USD was very strong through the first half of Q1, eventually bringing upon a test of the .8000 psychological level. This theme seemed to move similar to tech stocks in the US, with the Nasdaq 100 continue to run into mid-February trade, at which point a shift to value seemingly took place as the S&P 500 continued to show strength as the Nasdaq began to trade on its back foot.

To learn more about psychological levels, check out DailyFX Education

Nonetheless, an extremely weak US Dollar so far in Q2 has served to continue pushing many major pairs higher, AUD/USD included; and the fact that the Australian Dollar hasn’t really been able to take advantage of that move by re-testing and breaking through the .8000 handle highlights the fact that it may not be the most desirable venue for USD-short setups. Instead, AUD/USD may become enticing should USD-strength begin to show as a major trend again; with other areas carrying greater attractiveness for scenarios of USD-weakness.

Thus, the technical forecast for AUD/USD will be set to neutral for the week ahead. But, for both Aussie bulls and Aussie bears, there may be more amenable venues elsewhere, which we’ll look at below this next chart.

Technical Forecast for AUD/USD: Neutral

AUD/USD Daily Price Chart

AUD/USD Chart

Chart prepared by James Stanley; AUDUSD on Tradingview

AUD/JPY with Breakout Potential

I had looked at a breakout setup in AUD/JPY back in February, positioning for the 84 level to be the final target. This was largely because of some anticipated turbulence around the 85.00 psychological level, and that seems to be an issue again today with AUD/JPY price action still testing around this price.

What makes this a bit more exciting than bullish scenarios in AUD/USD above is the alignment of themes. If we are in a spot where USD-weakness continues, JPY-weakness may remain as even more forceful.

And from a technical point-of-view, AUD/JPY set a fresh three-year-high earlier this week, albeit temporarily, before buyers pulled back to find support on a rising trendline.

The technical forecast for AUD/JPY will be set to bullish for the week ahead.

Technical Forecast for AUD/JPY: Bullish

AUD/JPY Daily Price Chart

AUD/JPY Chart

Chart prepared by James Stanley; AUDJPY on Tradingview

AUD/CAD Bounces from Six-Month-Low, More Pain in Store?

If we’re looking for currencies that have been really strong of late, the Canadian Dollar sticks out, and it’s not without reason. The Bank of Canada became one of the first major central banks to discuss the possibility of post-pandemic policy. This is the same thing that the Fed is seemingly avoiding at every turn but, in Canada, that seems to be less of a problem.

Also helping with the CAD lift: Oil prices, which look primed for topside breakout potential. And the higher oil prices run, the more strength that may filter into the Canadian economy and, in-turn, the Canadian Dollar and this could continue to substantiate that trend in the commodity currency.

In AUD/CAD, where we can mesh up that really strong Canadian Dollar with the Aussie, the pair had just begun to bounce from freshly-established six-month-lows late this week. There is still somewhat of an oversold feel to this scenario, but there are a few areas of possible lower-high resistance that can allow for bearish trend continuation strategies. The .9500 level seems to be of importance, and this is relatively nearby.

For those looking at bearish strategies in the Australian Dollar, AUD/CAD resistance at or around that .9500 level can keep the pair as attractive.

Technical Forecast for AUD/CAD: Bearish

AUD/CAD Daily Price Chart

Australian Dollar Technical Analysis: AUD/USD, AUD/JPY, AUD/CAD

Chart prepared by James Stanley; AUDCAD on Tradingview

--- Written by James Stanley, Senior 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.

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