Australian Dollar Forecast: AUD/USD Price - Will Bulls Give up Control?
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Aussie Dollar vs US Dollar Technical Forecast
AUD/USD – Bulls Ease Up
On May 11, AUD/USD rallied to a near two-week high at 0.6561. However, the price declined after and settled below the 0.6500 handle signaling a slower bullish move. On Friday, the market closed the weekly candlestick in the red with a 1.8% loss.
This week, the Relative Strength Index (RSI) rebounded from 50 then pointed higher highlighting that the bullish momentum was still intact.
AUD/USD DAILY PRICE CHART (AUG 20, 2018 – May 20, 2020) Zoomed Out
AUD/USD DAILY PRICE CHART (March 2 – May 20, 2020) Zoomed IN
Looking at the daily chart, on April 7 AUD/USD broke above the March 31 high at 0.6214 then started a bullish momentum creating higher highs with higher lows. However, at the start of last week the market corrected its uptrend and created a lower high at 0.6561. This week, the price has reversed higher and remained in the current trading zone 0.6409 – 0.6684.
A close above the high end of the aforementioned trading zone means a stronger bullish sentiment and may trigger a rally towards 0.6827. A further close above that level could extend this rally towards 0.7015. Nonetheless, the weekly resistance levels underlined on the chart (zoomed in) should be considered.
In turn, any close below the low end of the zone could end the bullish bias and as a result, may encourage bears to press towards 0.6009. A further close below that level could send AUDUSD even lower towards 0.5796. That said, the weekly support areas and levels marked on the chart should be kept in focus.
AUD/USD Four-Hour PRICE CHART (April 6 – May 20, 2020)
Based on the analysis of the four-hour chart, at the start of May AUD/USD violated the uptrend line originated from the April 3 low at 0.5980. The market remained trading below this line reflecting the weakness of the bullish momentum discussed above on the daily chart. At present, the price eyes a test of the uptrend line originated from the May 7 at 0.6380. Any violation of this line would produce another bearish signal.
A break below 0.6368 would be considered an additional bearish signal and could send AUDUSD towards 0.6252. Although, the support level at 0.6325 should be monitored. On the other hand, any break above 0.6707 may cause a rally towards 0.6780. In that scenario, the weekly resistance level underscored on the chart should be watched closely.
See the chart to find out more about the key technical levels in a further bullish/bearish scenario.
Written By: Mahmoud Alkudsi, Market Analyst
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.