Australian Dollar Forecast: AUD/USD Price – A Rally or Reversal ?
Aussie Dollar vs US Dollar Technical Outlook
AUD/USD- Indecisive Traders
On Tuesday, AUD/USD surged to its highest level in nearly five weeks at 0.6444 then declined after. On Friday, the weekly candlestick closed with a Doji pattern, highlighting the market indecision at this stage.
Alongside that, the Relative Strength Index (RSI) fell from 62 to 54 then remained flat, reflecting paused uptrend momentum.
AUD/USD DAILY PRICE CHART (July 1, 2018 – April 20, 2020) Zoomed Out
AUD/USD DAILY PRICE CHART (FEB 20 – April 20, 2020) Zoomed IN
Looking at the daily chart, we noticed that AUD/USD neared the downtrend line originated from the Dec 31 high at 0.7032 . A break above that line would be considered a bullish signal. This may start a rally towards 0.7300 handle contingent on remaining above the downtrend line. See the chart (zoomed out)
On April 3, the market corrected its downtrend move as created a higher low at 0.5980. The price rallied after however, last week the pair declined to current trading zone 0.6009 – 0.6409 signaling bull’s reluctance to push the price higher.
Any close above the high end of the zone could encourage bulls to push AUDUSD towards 0.6684. Further close above that level might extend this rally towards 0.6827. That being said, the weekly resistance levels and area marked on the chart (zoomed in) should be considered.
On the flip -side, another close below the high end of the zone could press AUDUSD towards the low end of the zone. Further close below that level may send the price even lower towards 0.5796. In that scenario, the weekly support level underscored on the chart should be monitored.
AUD/USD Four-Hour PRICE CHART (Mar 20 – April 20, 2020)
From the four- hour chart, we noticed that currently AUD/USD trades above the uptrend line originated from the April 8 low. Any violation to this line would be considered a bearish signal. Another bearish signal would be generated if the price falls below the neckline of a developing double top pattern residing at 0.6264.
Thus, a break below the aforementioned neckline may send AUDUSD towards the April 8 low at 0.6115. Although, the weekly support level underlined on the chart should be kept in focus. In turn, any break in the other direction i.e. above 0.6460 would negate the double top pattern and could cause a rally towards 0.6595. Nevertheless, the resistance level at 0.6524 should be watched closely.
See the chart to find out more about key technical levels in a further bullish/bearish scenario.
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.