AUD/USD Price Analysis: Bounded by support and resistance, watch for breakout

AUD/USD bears facing a strong level of the support structure.
Price is trapped and swing traders await a breakout.

Ross J Burland FXStreet

AUD/USD has been in the hands of the bears since the end of August and following five consecutive months of higher highs and lows.

A deeper correction to a 38.2% retracement level brings in the 0.67 area, but there is a fair bit of significant support structure for bears to overcome first.

Additionally, net long AUD positions have bounced back modestly after plunging while net USD positions have fallen back into red amid growing market optimism that another fiscal package will be agreed by US policymakers.

Nevertheless, the following is a top-down analysis that illustrates how the price is bounded on the daily chart by support and resistance and where weekly support makes it a problematic journey to the monthly target.

Monthly chart

The monthly chart shows that the price is in a phase od distribution and the 38.2% Fibonacci retracement level is still some way off.

Weekly chart

The weekly chart is clear. The price is supported at a key structure which is problematic for the bearish case.

Daily chart

There is little that can be done from a swing trading perspective all the while that the price is bounded by support and resistance on the daily time frame.

Swing traders will be open to opportunities once the price has broken to either the upside or, more preferably, to the downside that coincides with the medium-term bearish analysis.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.