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Australian Dollar Price Forecast: AUD/USD, AUD/JPY, AUD/CHF

Australian Dollar Price Forecast: AUD/USD, AUD/JPY, AUD/CHF

Daniel Moss, Analyst

Australian Dollar, AUD/USD, AUD/JPY, AUD/CHF, IGCS – Talking Points:

  • AUD/USD eyeing a retest of its yearly high as price challenges key resistance.
  • AUD/JPY gearing up for further gains, with price consolidating above former resistance-turned-support.
  • An Ascending Channel formation may continue to guide AUD/CHF higher.
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The cyclically-sensitive Australian Dollar looks set to continue gaining ground against its haven-associated counterparts, as bullish technical setups take shape across several AUD crosses. Here are the key levels to watch for AUD/USD, AUD/JPY and AUD/CHF.

AUD/USD Daily Chart – Pitchfork Median Hampering Buyers

Australian Dollar Price Forecast: AUD/USD, AUD/JPY, AUD/CHF

AUD/USD daily chart created using Tradingview

Although the long-term technical outlook for AUD/USD remains bullish, a short-term pullback could be on the cards as buyers fail to penetrate resistance at the Pitchfork median line and January 27 high (0.7764).

With the RSI notably U-turning at 60, and the slope of the 50-day moving average (0.7563), further gains seem relatively unlikely in the near term.

Nevertheless, a daily close above 0.7750 would probably carve a path for buyers to retest the yearly high (0.7820). Clearing that needed to signal the resumption of the primary uptrend and pave the way for price to challenge the 50% Fibonacci (0.7965).

However, sliding below the psychologically pivotal 0.7700 mark could propel price back towards confluent support at the January 5 low (0.7660) and 34-EMA.

Australian Dollar Price Forecast: AUD/USD, AUD/JPY, AUD/CHF

The IG Client Sentiment Report shows 41.54% of traders are net-long with the ratio of traders short to long at 1.41 to 1. The number of traders net-long is 11.05% higher than yesterday and 8.90% lower from last week, while the number of traders net-short is 9.38% higher than yesterday and 24.75% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests AUD/USD prices may continue to rise.

Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed AUD/USD trading bias.

AUD/JPY Daily Chart – Consolidating Above Former Resistance-Turned-Support

Australian Dollar Price Forecast: AUD/USD, AUD/JPY, AUD/CHF

AUD/JPY daily chart created using Tradingview

AUD/JPY appears to be gearing up to extend its recent climb higher, as prices consolidate above former resistance-turned-support at the 2019 high (80.72).

With a bullish crossover taking place on the MACD, and the RSI eyeing a push into overbought territory, the path of least resistance seems skewed to the upside.

Gaining a firm foothold above 81.00 on a daily close basis would probably intensify buying pressure and open the door for the exchange rate to probe resistance at 82.20.

Alternatively, slipping back below the 8-EMA (80.59) could allow sellers to drive AUD/JPY back towards psychological support at 80.00.

Australian Dollar Price Forecast: AUD/USD, AUD/JPY, AUD/CHF

The IG Client Sentiment Report shows 31.66% of traders are net-long with the ratio of traders short to long at 2.16 to 1. The number of traders net-long is 13.46% higher than yesterday and 5.99% higher from last week, while the number of traders net-short is 2.80% lower than yesterday and 34.51% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests AUD/JPY prices may continue to rise.

Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed AUD/JPY trading bias.

AUD/CHF Daily Chart – Bearish RSI Divergence Hints at Fading Bullish Momentum

Australian Dollar Price Forecast: AUD/USD, AUD/JPY, AUD/CHF

AUD/CHF daily chart created using Tradingview

AUD/CHF also seems poised to continuing gaining ground, as the exchange rate tracks within the confines of an Ascending Channel.

However, bearish RSI divergence suggests that the recent surge higher could be running out of steam.

That being said, remaining constructively positioned 8-EMA (0.6884) likely clears the road for buyers to drive price towards confluent resistance at the channel midpoint and 0.6955. Hurdling that brings psychological resistance at 0.7000 into play.

Conversely, a daily close below the 8-EMA could trigger a pullback to channel support and the 34-EMA (0.6829).

-- Written by Daniel Moss, Analyst for DailyFX

Follow me on Twitter @DanielGMoss

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