AUD/USD Price Analysis: Symmetrical Triangle shouts volatility contraction

The AUD/USD pair is displaying topsy-turvy moves in a narrow range of 0.7187-0.7200. The unavailability of any potential trigger has turned the asset sideways. This week, the asset has auctioned in a range of 0.7157-0.7240, and a similar movement is expected further amid volatility contraction.

On an hourly scale, the asset is trading in a Symmetrical Triangle pattern that signals a slippage in volatility, followed by a breakout in the same. The ascending trendline of the above-mentioned chart pattern is placed from June 2 low at 0.7140 while the downward sloping trendline is plotted from Friday’s high at 0.7283.  

The 50- and 200-period Exponential Moving Averages (EMAs) at 0.720 and 0.7187 respectively have turned flat, which signals a consolidation ahead.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted into a 40.00-60.00 range, which bolsters the odds of a rangebound move ahead.

Should the asset oversteps June’s high at 0.7283, it will trigger the upside break of a Symmetrical Triangle, which will infuse fresh blood into the aussie bulls for an upside move towards the April 19 low at 0.7343, followed by the round-level resistance at 0.7400.

Alternatively, aussie bulls can lose their grip if the asset drops below June 2 low at 0.7140, which will drag the asset towards May 26 high at 0.7110. Breach of the latter will expose the asset to more downside towards May 18 high at 0.7048.

AUD/USD hourly chart