Australian Dollar Forecast: AUD/USD Price May Rally to a One-Year High
Aussie Dollar vs US Dollar Technical Outlook
AUD/USD Price U-Turn
On June 30, AUD/USD declined to its lowest level in a week at 0.6832. However, the price reversed higher during the week then closed the weekly candlestick with a 1.1% gain.
The market optimism remained intact as the global monotony and fiscal stimulus measures combined with easing the restrictions in some countries led recently to positive data releases. That said, the increasing numbers of coronavirus cases in the US continue to keep investors jittery.
AUD/USD DAILY PRICE CHART (AUG 20, 2018 – July 9, 2020) Zoomed Out
AUD/USD DAILY PRICE CHART (April 13 – July 9, 2020) Zoomed IN
On June 16, AUD/USD corrected its upward trend and started a sideways move creating a set of higher lows with lower highs. Later on, the price was rejected on multiple occasions at the low end of the current trading zone 0.6827 – 0.7015 then rallied after indicating that the balance was tipping to the bull's side. Today, the pair has rallied to a four-week high at 0.7001.
A close above the high and of the zone signals that bulls could push AUDUSD towards the 0.7300 handle, and any further close above that level may encourage them to extend the rally towards 0.7414.
On the other hand, any failure in closing above the high end reflects bull’s hesitation and may cause some bull’s exit the market allowing the pair to fall towards the low end of the zone. Any further close below that level could send the market even lower toward 0.6684.
AUD/USD Four-Hour PRICE CHART (June 10 – July 9, 2020)
At the start of July, AUD/USD broke and remained above the middle line on the downtrend lines fan originated from the June 10 high at 0.7064, and generated a bullish signal.
Today, the price tests the higher line of the fan hence, any break above this line would generate another bullish signal, while a break below the uptrend line originated from the July 2 low at 0.6901 could produce a bearish signal.
To conclude, a break above 0.7085 may cause a rally towards 0.7160, while a break below 0.6920 may send AUDUSD towards 0.6837.Nonetheless, the weekly support and resistance levels underscored on the four-hour chart should be watched closely.
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.