Outlook for the Australian dollar:
- Australian dollar / US dollar It lacks conviction in the direction in recent months, as the pair has been stuck in a consolidation phase
- While range markets are predictable, traders should exercise caution before a high-impact event looms on the calendar: the United States. economic inflation a report
- This article looks at possible technical scenarios for the Aussie
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AUD/USD has lacked strong directional conviction since early March, as it is trading largely sideways, with the exchange rate moving flawlessly within the confines of a sideways channel – a clear sign of consolidation ahead of the next explosive move.
Diverging markets can be predictable and easy to trade at times, but the whole premise is to create a long position when the prices of the underlying asset are moving towards support in anticipation of a bounce or selling at resistance in preparation for a potential pullback.
Looking at the daily chart of the Aussie, range trading strategies could have been effective recently as the pair respected the upper (0.6800) and lower (0.6500) of the time it was trapped in for more than two months. Although the setup may continue to work, caution is needed, with volatility rising in the coming days due to a highly impactful event on the economic calendar: US CPI report from April.
US inflation data on Wednesday at 8:30 am ET is due to bring extreme volatility to the forex market, so traders should exercise restraint when it comes to trading, and most importantly, pay attention to price action to better predict market bias on near term.
In terms of likely scenarios, if AUD/USD is rejected from the resistance at 0.6800, the 200-day simple moving average and the rising trend line extending from the October 2022 lows should fend off the bears, but if they are decisively pushed out, the sellers could Launching an attack on the 2023 lows near 0.6575.
Alternatively, if price action consolidates to the upside with a clear breakout of the resistance at 0.6800, additional buyers are likely to step in, creating the right conditions for a rally towards 0.6880. For more strength, focus moves higher to the dynamic resistance at 0.7000.
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change in |
Longs |
Shorts |
Hey |
| Daily | 11% | -14% | -3% |
| weekly | -19% | 61% | 6% |