AUD/USD Technical Outlook
·
Bearish signals on AUD/USD
price chart
·
Neutral outlook while above
0.7235
Bears Pullback
On October 1, AUD/USD hit an over one week high at 0.7207 then
retreated after. Ultimately, a weekly candlestick closed in the green with a
2.0% gain. Alongside that, the Relative Strength Index (RSI) failed to cross
above 50 indicating that downtrend momentum was still in place.
AUD/USD Daily Price Chart (July 24 – October 6, 2020)
Chart
source, Webtrader, Capex.com
On September 25, AUD/USD rebounded from the low end of the
current trading zone 0.7018 – 0.7235 and pointed higher eyeing a test of the
high end. However, the price failed last week to close above the 50-day average
highlighting that bearish sentiment was still intact. Hence, the price could be
on the way to re-test the low end of the trading zone.
A daily close below the low end of the zone at 0.7018 could
encourage bears to press AUD/USD towards the monthly support at 0.6772
(February 2020 high).
On the other hand, a daily close above the high end of the
zone at 0.7235 may cause a rally towards the weekly resistance at 0.7327 (May
2017 low).
Would you like to trade on live oil prices with a UAE
regulated broker? Open
an account
AUD/USD Four Hour Price Chart (September 25 – October 6, 2020)
Chart
source, Webtrader, Capex.com
On October 2, AUD/USD traded below the bullish trendline
support originated from the September 25 low at 0.7004. The price rebounded
twice from the trendline resistance highlighting the bull’s weakness.
In conclusion, while bearish momentum is weak, a violation
of the neckline of the double top pattern located at 0.7129 could accelerate
the downtrend move. Therefore, a break below 0.7097 may send the pair towards
0.7030, while a break above 0.7257 could trigger a rally towards 0.7308. As
such, the support and resistance levels underlined on the chart should be
considered.
