AUD/USD Technical Outlook: Bullish
- AUD/USD, 200-Day Simple Moving Average Rescore
- Trendline resistance moves to focus versus May highs
- MACD and RSI oscillators point to increasing momentum.
The Australian dollar has been strengthening against the US dollar over the past few weeks, and after sinking below the previous week’s baseline it rose again above the 200-day simple moving average. AUD/USD has now regained its previous support level with the previous neckline forming the Head and Shoulders pattern.
Despite rising for the fifth day in a row, AUD/USD did not recover from last week’s decline after the FOMC decision charged the US dollar. However, bullish energy could follow for the week ahead. Especially considering that the move above the 200-day SMA has spurred confidence between the strength of the Australian dollar.
If the currency pair continues its uptrend this week, the downward resistance trendline from the highs of the May swing will be the focus. The previous neckline support area with the 200-day SMA could support the downtrend. However, if these levels fail, the bull could capitulate quickly and the price could fall more quickly.
The Moving Average Convergence Divergence (MACD) oscillator is pointing higher as a potentially bullish signal approaches as the MACD line appears to cross above the signal line. The Relative Strength Index (RSI) is also moving higher after rising from oversold conditions last week. Overall, AUD/USD’s technical posture has improved, but downside risks remain.
AUD/USD daily chart
Charts made with TradingView
AUD/USD Trading Resources
— By Thomas Westwater, analyst at DailyFX.com
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