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Australian Dollar Price Outlook: AUD/USD, AUD/NZD, AUD/CHF, EUR/AUD

Australian Dollar Price Outlook: AUD/USD, AUD/NZD, AUD/CHF, EUR/AUD

Daniel Moss, Analyst
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Australian Dollar, AUD/USD, AUD/NZD, AUD/CHF, EUR/AUD – Talking Points:

  • Head and Shoulder top hints at further losses for AUD/USD.
  • AUD/CHF careening towards 12-month trend support.
  • Double Bottom reversal playing out for EUR/AUD.
  • AUD/NZD eyeing a push to challenge the 2020 high.
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The Australian Dollar looks at risk of further losses against its haven-associated counterparts as risk appetite notably sours into month’s end. However, the commodity-sensitive currency may extend gains against its trans-Tasman counterpart. Key levels to watch for AUD/USD, AUD/NZD, AUD/CHF and EUR/AUD rates.

AUD/USD Daily Chart – Head and Shoulders Neckline Break Implies Further Downside

AUD/USD daily chart created using Tradingview

The Australian Dollar looks set to extend its 5.36% decline from the yearly high set on February 25 (0.8007), as price slices convincingly through the neckline of a Head and Shoulders reversal pattern.

A short-term relief rally back towards the 38.2% Fibonacci (0.7619) could be on the cards if support at the Pitchfork parallel and 0.7580 mark hold firm.

However, with the RSI diving to its lowest levels since September 2020, and the slopes of all six moving averages notably flattening, the path of least resistance seems skewed to the downside.

A daily close below the February low (0.7563) would probably intensify selling pressure and carve a path for prices to challenge the sentiment-defining 200-MA (0.7361), with the Head and Shoulder pattern’s implied measured move suggesting the exchange rate could fall an additional 4.8% from current levels and probe the 0.7200 mark.

AUD/CHF Daily Chart – Eyeing Test of 1-Year Trend Support

AUD/CHF daily chart created using Tradingview

The risk-sensitive AUD also looks set to lose further ground in the short-term to the haven-associated CHF, as a Shooting Star reversal candle on March 18 opened the door for sellers to drive price back towards the 34-EMA (0.7085).

However, the longer-term outlook remains constructive, given the exchange rate is carving out a Bull Flag continuation pattern and continues to respect the uptrend extending from the March 2020 nadir.

Nevertheless, with the RSI drifting below its midpoint, and the 8-EMA and 21-EMA pointing lower, a more extended pullback seems on offer.

Clearing psychological support at 0.7100 likely generates a move to challenge supportive confluence at the 50% Fibonacci (0.7007) and 1-year trend support.

On the other hand, a resumption of the primary trend could be at hand if 0.7100 stifles selling pressure, with a daily close above the yearly high (0.7260) required to validate the Bull Flag continuation pattern.

EUR/AUD Daily Chart – Double Bottom Playing Out

EUR/AUD daily chart created using Tradingview

The lower-beta Euro appears positioned to extend recent gains against the Aussie in the near term, as the exchange rate slices through Descending Channel resistance after carving out a Double Bottom reversal pattern.

With the RSI surging above 50, and price tracking firmly higher than all three short-term moving averages, further gains seem likely.

A daily close above the trend-defining 55-EMA (1.5605) brings the Double Bottom neckline (1.5691) into the crosshairs, with a convincing break above clearing a path for buyers to challenge the 100-MA (1.5839) for the first time in four months.

The Double Bottom’s implied measured move suggesting prices could climb as high as the sentiment-defining 200-MA (1.6110).

On the other hand, if buyers fail to breach the 55-EMA, a pullback towards psychological support at 1.5500 could be at hand.

AUD/NZD Daily Chart – Symmetrical Triangle Break Hints at Extended Gains

AUD/NZD daily chart created using Tradingview

Although AUD looks at risk of further losses against funding currencies, it remains positioned to continue gaining ground against its trans-Tasman counterpart.

The AUD/NZD exchange rates surge to fresh yearly high may just be the beginning of an extended move higher, as prices validate the topside break of a Symmetrical Triangle consolidation pattern.

A Golden Cross moving average formation, in tandem with the RSI eyeing a push into overbought territory, is indicative of swelling bullish momentum and points towards further gains.

Gaining a firm foothold above the 100% Fibonacci (1.0927) would likely generate a push to probe the 2020 high (1.1044), with a break above carving a path to test the 161.8% Fibonacci (1.1104).

However, failing to overcome resistance at 1.0900 could see prices fall back to former resistance-turned-support at the January high (1.0843).

-- Written by Daniel Moss, Analyst for DailyFX

Follow me on Twitter @DanielGMoss

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