AUD/USD Price Analysis: Begins trading in a range-bound mode
|- AUD/USD is trading in a range and may have begun a sideways trend.
- It has bounced off the floor of a prospective range and is probably rising up to the ceiling.
- It would require a decisive breakout from the range to renew directionality.
AUD/USD trades about a third of a percent higher in the 0.6630s on Thursday after finding support and bouncing from the May 24 swing lows.
It is possible the pair has entered a sideways trend with a range high at the May 26 high of 0.6680 and a floor at 0.6591 (May 30 low).
AUD/USD 4-hour Chart
If AUD/USD is in a short-term sideways trend it will probably extend its range. The next move is likely to be a continuation of the rally from the range floor up to the range ceiling at 0.6680.
AUD/USD is currently facing resistance from the 100 and 50 Simple Moving Averages, however, which will probably impede progress higher. A break above the 50 SMA at 0.6641 would be necessary to reconfirm the bullish bias and indicate odds favor a move back up to the range highs.
AUD/USD broke down from its rising channel on May 22, bringing the established uptrend into doubt. Follow-through lower was weak and the pair recovered. There is no clear short-term directional trend suggesting the trend may actually be sideways.
It would require a decisive break below 0.6591 to confirm more downside, with the next target probably at 0.6560 where the 100 and 50-day SMAs are located (not shown).
Alternatively, a decisive break above the range ceiling would reassert the bullish bias and probably lead to 0.6714 (May 14 high).
Decisive breaks are accompanied by long candles that break through the level and close near their high or low or three consecutive candles that pierce the level in question and are all of the same color (red for a bearish decisive break and green if bullish).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.