AUSTRALIAN DOLLAR FORECAST: AUD/USD PRICE COILING BETWEEN KEY TECHNICAL BARRIERS – BREAKOUT TRADE LEVELS TO WATCH
- AUD/USD attempts to rebound as market sentiment whipsaws and risk appetite gyrates
- Australian Dollar continues to ping-pong back and forth between key technical barriers
- AUD/USD price action may be ripe for a big move following its recent consolidation
The Australian Dollar is trying to climb its way back into positive territory on the week with AUD/USD prices jumping nearly 50-pips off intraday lows. Spot AUD/USD has faced heavy selling pressure around the critical 0.7000- level recently, but Aussie-Dollar buyers have kept the major currency pair fairly bid. This has formed a broad trading range, underpinned by key barriers of technical support and resistance, which have potential to keep AUD/USD price action relatively contained.
AUD/USD PRICE CHART: DAILY TIME FRAME (27 MAR TO 14 JUL 2020)
A Bollinger Band squeeze over the last several trading sessions also highlights AUD/USD price consolidation. Similarly, the relative strength index indicates how Australian Dollar momentum to the upside has stuttered as the bullish trend faces pushback.
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This seems to have corresponded with a downshift in trader sentiment, and deterioration in risk appetite, as economic outlook held by market participants grows increasingly uncertain amid resurfacing coronavirus concerns.
AUD/USD PRICE CHART: 2-HOUR TIME FRAME (30 JUN TO 14 JUL 2020)
That said, conflicting fundamental drivers and technical signals continue to steer the Australian Dollar sideways. Although spot AUD/USD price action has gained ground so far today, the pro-risk FX pair could pivot back lower later in the session or trading week if confluent resistance near month-to-date highs stymies possible advances by the Aussie.
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On the other hand, the Australian Dollar, alongside other risk-assets such as the S&P 500, have traded quite resiliently as stock market euphoria prevails. This comes despite a resurgence of several bearish headwinds like escalating China tension or potential for worse-than-expected equity earnings.
As such, spot AUD/USD price action could continue climbing higher judging by the series of higher lows recorded on July 07, 10, and 13. Nevertheless, breaching either of these key technical barriers around 0.6930 or 0.6990 might foretell a possible breakdown or breakout by the Aussie-Dollar respectively.
Read More – EUR/USD & AUD/USD in Focus Ahead of ECB, Jobs & Retail Sales
— Written by Rich Dvorak, Analyst for DailyFX.com
Connect with @RichDvorakFX on Twitter for real-time market insight