Australian Dollar Forecast: Will AUD/USD Bulls Control the Price Action?
Aussie Dollar vs US Dollar Technical Outlook
AUD/USD- Reversed Course
On March 19 AUD/USD tumbled to 0.5509 – its lowest level in nearly 18 years. However, the price rallied as some bears seemed to cover then closed with a Doji pattern signaling a possible reversal. Last week, the price rallied further as more bears eased up and on Friday, the market closed the weekly candlestick in the green with 6.0% gain.
Alongside that, the relative Strength Index (RSI) abandoned oversold territory, highlighting a weaker downtrend move.
AUD/USD DAILY PRICE CHART (DEC 1, 2018 – Mar 31, 2020) Zoomed Out
AUD/USD DAILY PRICE CHART (DEC 1 – MAR 31, 2020) Zoomed IN
Looking at the daily chart, we noticed that last week AUD/USD recovered more of previous weeks’ losses and climbed to current trading zone 0.5796 – 0.6009 eyeing a test of the high end of it. Today, the pair has tested the 50-day average for the first time in 3 weeks. Any close above 50DMA would be considered a bullish signal.
Thus, a close above the high end of the zone may encourage bulls to push towards 0.6684. Further close above that level could extend the rally towards 0.6827. In that scenario, special attention should be paid to the weekly resistance levels and area marked on the chart (zoomed in) as some traders could join/exit the market around these points.
In turn, any failure in closing above the high end of the zone could reverse the pair’s direction towards the low end of the zone. Further close below that level opens the door for AUDUSD bears to press towards 0.5796. That said, the daily support level underscored on the chart should be kept in focus.
AUD/USD Four-Hour PRICE CHART (Mar 9 – Mar 31, 2020)
From the four- hour chart, we noticed that on Tuesday AUD/USD violated the downtrend line originated from the March 9 high at 0.6685 eyeing a test of 0.6524.
Thus, a break above 0.6294 would be considered as another bullish signal. This may cause a rally towards the high end of current trading zone discussed above on the daily chart. Although, the weekly resistance level underlined on the chart should be considered. On the flip side, a break below 0.6090 could send AUDUSD towards the low end of current trading zone. Yet, the daily support level printed on the chart should be kept in focus.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.