Australian Dollar Slips to Open the Week but Remains in the Range. Where to for AUD/USD?

Australian Dollar, AUD/USD, US Dollar, AUD/JPY, Japanese Yen – Talking Points

The Australian Dollar started the week on the back foot, with the US Dollar consolidating across the board. Although declining on Monday, looking at the four-hour chart, the uptrend seems to remain intact for now.

Three roughly parallel ascending trend lines speak of a similar rate of appreciation. A break below the near-term trend, currently intersecting at 0.6690, could open a move lower.

Support could lie at some Fibonacci Retracement levels from the move from October’s low of 0.6167 to this month’s peak of 0.6851. The 38.2% retracement is 0.6590, the 50% is at 0.6510 and the 61.8% retracement is at 0.6427.

AUD/USD 4 HOUR DIALOGUE

Chart created in TradingView

Moving on to the daily chart, AUD/USD has been in a wide range of 0.6550 – 0.6850 for a month. Momentum indicators seem to agree with a range-type environment, with mixed signals emerging from the arrangement of several Simple Moving Averages (SMA).

The price is above all tenors from 10- to 100-days but below the 200- and 260-day SMA. This may suggest that short- and medium-term bullish momentum could develop, but the long-term setup remains a headwind for now.

The previous highs of 0.6916 and 0.6956 are also near the 200- and 260-day SMAs respectively and these levels could offer resistance. Below them, the recent high of 0.6851 could offer resistance as it also has a downtrend closing on it.

On the downside, support may be found at the previous lows of 0.6669, 0.6585, 0.6387, 0.6272 or 0.6170. A break point at 0.6548 is also a possible support level.

An uptrend could provide support, currently intersecting at 0.6460.

Chart created in TradingView

AUD/JPY

AUD/JPY remains in a wide 90.85 – 95.74 range, which it has been in for almost 3 months.

The price tried to look lower at the beginning of the month, but could not break below the previous lows of 90.85 and 90.53 and these levels can continue to provide support.

That move went below an ascending trend line that has been playing out for a few months and may add weight to the prospect that AUD/JPY could be in a range for now.

The high seen on Friday and so far on Monday could not overcome break resistance at 92.89 and 92.97 and these levels may continue to offer resistance.

Further up, the peak of 95.56 coincides with a breakout point that could continue to offer resistance before the previous high of 95.74.

AUD/JPY RAPPER

Chart created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter