AUD/USD Price Analysis: Showing potential for a bullish reversal

AUD/USD briefly broke out of a descending channel and rallied.
The rally was cut short, however, and the pair retreated back inside the channel.
If AUD/USD rebreaks above the previous high of the initial breakout rally, it will be a bullish sign.

Joaquin Monfort FXStreet

AUD/USD has been falling in a descending channel since the March 8 high at 0.6667.

Over the last three days the pair has risen up from the base of the channel to the highs and briefly broke upper borderline on Thursday before retreating back inside.

Australian Dollar versus US Dollar: 4-hour chart

A move back above the post-breakout rally peak, at 0.6620, however, would confirm two things.

First, the breakout from the channel was a valid bullish breakout, likely to extend higher.

Second, the short-term trend had probably reversed from bearish to bullish.

Such a move would probably lead to a move up to a conservative target at 0.6670, calculated as the 0.618 Fibonacci extension of the height of the channel extrapolated from the breakout point higher.

Further strength could lead to the achievement of the second target at 0.6715, which is the full height (Fib. 1.000) of the channel extrapolated higher.

Author

Joaquin Monfort

FXStreet

Joaquin Monfort is a financial writer and analyst with over 10 years experience writing about financial markets and alt data. He holds a degree in Anthropology from London University and a Diploma in Technical analysis.

AUD/USD challenges four-week highs beyond 0.7000

AUD/USD continues its march north, this time leaving behind the key 0.7000 hurdle and trading at shouting distance from multi-week tops. The persistent recovery in spot comes amid further losses in the Greenback amid extra improvement in the risk complex.

USD/JPY remains confined in a familiar range below 158.50

USD/JPY sees some dip-buying in the Asian session on Wednesday, though it remains confined within a multi-week range near 158.50 as the uncertainty over the timing of the next BoJ rate hike keeps Japanese Yen bulls on the defensive. Meanwhile, hawkish Fed expectations, bolstered by inflation risks stemming from volatile oil prices, underpin the US Dollar. However, looming intervention fears could limit JPY losses and cap the currency pair.

Gold advances modestly; targets $4,150

Gold prices manage to reverse three consecutive daily declines, trading just below the $4,150 mark per troy ounce on Wednesday. The precious metal’s recovery comes amid a slight drop in the US Dollar, mixed US Treasury yields across the board and a widespread cautious tone from the US-Iran front.

XRP and XLM regain momentum as derivatives activity picks up

Ripple and Stellar are regaining momentum on Wednesday, mirroring gains across major digital assets. XRP has climbed above $1.36, while XLM has reached $0.1854, reinforcing support levels recently tested. This gradual price increase comes amid sticky inflation in the United States and ahead of the Federal Reserve’s monetary decision next week.

What the midterm elections mean for Treasury yields, the Dollar and Gold

Democrats are priced to take the House, so November 3 comes down to the Senate and how much Washington can borrow without the other party. Treasury yields will show the answer first, then the Dollar and Gold. On November 3, Americans vote for all 435 House seats and 35 Senate seats. For bond prices, the result comes down to one thing: how much the government will borrow over the next two years.

The US Dollar fell. Gold didn't rally. That tells you everything

Gold (XAU/USD) is struggling to capitalize on a weaker US Dollar (USD), after repeatedly failing to establish itself above the $4,200 level. The precious metal remains confined to a relatively narrow trading range despite a combination of developments that would normally support higher prices.