Technical Analysis – AUDUSD in a very gentle upward move; who will blink first?
April 18, 2023 1:27 pm
AUDUSD is trying to find its direction with the 0.6797 level acting as a ceiling at this juncture. This pair has actually been moving very gently inside an upward trending channel since the March 10, 2023 low of 0.6563. Considering the overall AUDUSD price action since mid-January 2023, this channel tends to favour downside breaks.
This range-trading activity is confirmed by the subdued Average Directional Movement Index (ADX) and the balanced stochastic oscillator. The former has dipped below its 25-threshold and the latter is hovering around its 50-midpoint, unable to give any indication of the next movement. The tightness of the Bollinger Bands and the convergence of the 50- and 100-day simple moving averages (SMAs) raise the possibility of the sizeable move taking place soon.
Should the bulls manage to break the 0.6797 level populated by the November 15, 2022 high and the 200-day SMA respectively, they would quickly come up against the 50% Fibonacci retracement of the April 5, 2022 – October 13, 2022 downtrend at 0.6815. Higher, resistance could be met at the 0.7063-0.7091 range set by the January 18, 2023 high and the 61.8% Fibonacci retracement respectively.
On the other hand, should the bears regain market control, the 0.6681 level defined by July 14, 2022 low would be the initial target. The November 3, 2022 upward trendline and the lower boundary of the upward trend channel could then trouble the bears.
To conclude, AUDUSD bears are preparing as the current upward channel tends to favour downward breakouts. On the upside, the bulls have set their eye on the 0.6797 level again.
AUDUSD is trying to find its direction with the 0.6797 level acting as a ceiling at this juncture. This pair has actually been moving very gently inside an upward trending channel since the March 10, 2023 low of 0.6563. Considering the overall AUDUSD price action since mid-January 2023, this channel tends to favour downside breaks.
This range-trading activity is confirmed by the subdued Average Directional Movement Index (ADX) and the balanced stochastic oscillator. The former has dipped below its 25-threshold and the latter is hovering around its 50-midpoint, unable to give any indication of the next movement. The tightness of the Bollinger Bands and the convergence of the 50- and 100-day simple moving averages (SMAs) raise the possibility of the sizeable move taking place soon.
Should the bulls manage to break the 0.6797 level populated by the November 15, 2022 high and the 200-day SMA respectively, they would quickly come up against the 50% Fibonacci retracement of the April 5, 2022 – October 13, 2022 downtrend at 0.6815. Higher, resistance could be met at the 0.7063-0.7091 range set by the January 18, 2023 high and the 61.8% Fibonacci retracement respectively.
On the other hand, should the bears regain market control, the 0.6681 level defined by July 14, 2022 low would be the initial target. The November 3, 2022 upward trendline and the lower boundary of the upward trend channel could then trouble the bears.
To conclude, AUDUSD bears are preparing as the current upward channel tends to favour downward breakouts. On the upside, the bulls have set their eye on the 0.6797 level again.
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