Australian Dollar Outlook: AUD/USD Price – Stuck in Consolidation Mode
Aussie Dollar vs US Dollar Technical Forecast
AUD/USD – In The Green
Last week, AUD/USD rallied to its highest levels in a week then closed on Friday with a 0.4% gain. Yesterday, the monthly candlestick closed in the green with a near 3.5% gain.
The market rallied on the expectations of a V-shape recovery driven by central banks stimulus around the globe. Nonetheless, the US dollar recovered some territory against major currencies as investors weighed fears from the accelerating coronavirus cases against improving figures in the global economy.
AUD/USD DAILY PRICE CHART (AUG 20, 2018 – July 1, 2020) Zoomed Out
AUD/USD DAILY PRICE CHART (FEB 13 – July 1, 2020) Zoomed IN
On June 10, AUD/USD retreated to the current trading zone 0.6827 – 0.7015 then paused its upward trend and started a sideways move creating a lower high with a higher low.
A close above the high end of the zone indicates that AUDUSD could resume bullish price action towards the 0.7300 handle and any further close above that level may extend the rally towards 0.7414.
On the other hand, a close below the low end of the zone reflects bull’s weakness and may cause a selloff towards 0.6684. Any further close below that level could send the pair even lower towards 0.6409.
AUD/USD Four-Hour PRICE CHART (June 6 – July 1, 2020)
Last week, AUD/USD broke above the lower downtrend line originated from the June 10 high at 0.7064, and generated a bullish signal.
Today, the price tests the higher downtrend line originated from the aforementioned high. Thus, a break above this line would generate another bullish signal while any successful break below the uptrend line originated from the June 22 low at 0.6814 would generate a bearish signal.
To conclude, a break above 0.6958 may cause a rally towards the high end of the current trading zone discussed above on the daily chart while a break below 0.6774 may send AUDUSD towards 0.6707.Nonetheless, the weekly support and resistance levels marked on the four-hour chart should be considered.
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.