Australian Dollar Outlook: AUD/USD Price – A Possible Reversal on the Horizon
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Aussie Dollar vs US Dollar Technical Forecast
- AUD vs USD price chart reveals that the market may reverse lower
- Key signals and levels to keep in track of
AUD/USD – Multi-Week High
On Wednesday, AUD/USD soared to a near three-month high at 0.6616. The price retreated after and settled below the 0.6600 handle. Yet, on Friday the weekly candlestick closed in the green with a 1.9% gain.
This week, the Relative Strength Index (RSI) remained above 50 indicating that bulls were in control.
AUD/USD DAILY PRICE CHART (Sep 20, 2018 – May 28, 2020) Zoomed Out
AUD/USD DAILY PRICE CHART (March 20 – May 28, 2020) Zoomed IN
Looking at the daily chart, on May 15 AUD/USD rebounded around the low end of the current trading zone 0.6409 – 0.6684 then rallied after.Yesterday, the price declined before testing the high end of the zone signaling bull’s hesitation at this stage. Additionally, a bearish price/RSI divergence has been spotted with the first created a high with a higher high meanwhile, the latter created a high with a lower high highlighting a possible reversal of the uptrend move.
Another close below the high end of the aforementioned zone could point AUDUSD towards the low end of it. A further close below that level may send the price even lower towards 0.6009. In that scenario, the weekly support area and level marked on the chart (Zoomed in) should be considered.
On the other hand, a close above the high end of the zone signals that bulls may push towards 0.6827. A further close above this level could extend this rally towards 0.7015. That said, the weekly resistance levels underscored on the chart should be monitored.
AUD/USD Four-Hour PRICE CHART (MAy 6 – May 28, 2020)
Based on the analysis of the four-hour chart, at the start of last week AUD/USD rallied above the downtrend line originated from the May 11 high at 0.6561 and generated a bullish signal. Yesterday, the pair respected the uptrend line originated from the May 15 low indicating that bullish momentum was still intact. Therefore, any violation of this line would be considered a bearish signal.
A break below 0.6548 could send AUDUSD towards 0.6445. Yet, the daily support level underlined on the chart should be considered. In turn, a break in the other direction i.e. above 0.6707 may trigger a rally towards 0.6780. Nonetheless, the weekly resistance level printed on the chart should be kept in focus.
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.