Australian Dollar: AUD/USD Price – Eyes Key Neckline Support
Aussie Dollar vs US Dollar Technical Forecast
AUD/USD – Bullish Market
On Friday, AUD/USD rallied to an over two and a half- month high at 0.6683 then closed the weekly candlestick in the green with a 2.0% gain. This week, the market has continued bullish price action and neared the 0.7000 handle.
Alongside this, the Relative Strength Index (RSI) climbed to overbought territory highlighting the strength of bullish momentum.
AUD/USD DAILY PRICE CHART (AUG 20, 2018 – June, 2020) Zoomed Out
AUD/USD DAILY PRICE CHART (FEB 13 – June 4, 2020) Zoomed IN
On April 23, AUD/USD closed above the 50-day moving average and started a bullish bias creating a set of higher highs with higher lows. On Tuesday, the price climbed to the current trading zone 0.6827 – 0.7015 eyeing a test of the high end of it.
A close above the high end of the aforementioned trading zone may encourage bulls to push towards 0.7158, and a further close above this level could extend the rally towards the 0.7300 handle.
In turn, any failure in closing above the high end of the zone signals bull’s hesitation yet, it would require a close below the low end of the zone to increase the likelihood of any fall towards 0.6684. A further close below this level could send AUDUSD even lower towards 0.6409.
That said, the weekly support and resistance levels underlined on the daily chart (zoomed in) should be considered in both bullish/ bearish scenarios.
AUD/USD Four-Hour PRICE CHART (MAy 6 – June 4, 2020)
At the start of last week, AUD/USD broke above the downtrend line originated from the May 20 high at 0.6616 and respected the uptrend line originated from the May 15 low at 0.6402 indicating that bulls were in charge. Later on, the market paused its uptrend move and created an ascending triangle yet, on Monday the pair resumed bullish price action.
Yesterday, the market double topped and hinted a possible reversal on the horizon therefore, any violation of the neckline located at 0.6856 would be considered a bearish signal.
A break below 0.6810 would be considered an additional bearish signal and could send AUDUSD towards 0.6707. On the other hand, any break above 0.7032 may cause a rally towards 0.7148. Nonetheless, the daily support and resistance marked on the four-hour chart should be kept in focus.
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.