The Australian Dollar has recently been on a strong bullish march following slipping sentiment in the US Dollar. However, some concerning fundamental factors are impact the pair in the short term and the rally has inevitably stalled. Subsequently, the question remains as to which way for the little Aussie battler in the short term.
Taking a look at the Aussie Dollar’s technical indicators appears to confirm an intraday neutral bias. Despite some sharp selling pressures following last week’s RBA rate decision, the pair has managed to keep the key 0.7476 support level intact. However, the pair is still facing some sharp divergence in the 4-hour MACD which could be signalling a short term top starting to form.
On the upside, the pair’s daily RSI oscillator is still within neutral territory which means that the recent consolidation has given the indicator some room to move. However, the upside might be relatively limited with a key Fibonacci retracement level at 0.7849 likely to cap any further upside moves.
A downside move would likely face some relatively strong support from the bottom of the swing candle from late march, at 0.7476. On extension, the next relatively strong reversal zone is the 55 Day EMA which currently ranges around the 0.7402 mark. Subsequently, there is also plenty of reason to believe that a bearish move would like reverse close to the key 74 cent handle.
Ultimately, given the lack of a strong trend, the pair’s technical indicators lend themselves to wards a neutral intraday bias. However, the long term view still presents a bearish contention given that price action is still contained within a long term falling channel. Subsequently, any moves within this channel are likely to be short term corrective in nature until a confirmed break of the trend occurs.
Risk Warning: Any form of trading or investment carries a high level of risk to your capital and you should only trade with money you can afford to lose. The information and strategies contained herein may not be suitable for all investors, so please ensure that you fully understand the risks involved and you are advised to seek independent advice from a registered financial advisor. The advice on this website is general in nature and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances. The information in this article is not intended for residents of New Zealand and use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Knight Review is not a registered financial advisor and in no way intends to provide specific advice to you in any form whatsoever and provide no financial products or services for sale. As always, please take the time to consult with a registered financial advisor in your jurisdiction for a consideration of your specific circumstances.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.