The Aussie dollar’s been on a tear this August, rallying from .6425 to trade about 100 pips higher where it sits now.
Is AUD/USD gearing up to return to a longer-term uptrend?
Or are we just getting a gift here, a better price to sell the Aussie before it heads back down?
AUD/USD Daily Forex Chart by TradingView
The U.S. extending its trade truce with China and the RBA delivering a rate cut that wasn’t all that dovish have helped the Aussie hold its ground against major counterparts like the U.S. dollar.
At the same time, soft U.S. data and changes in the Fed’s Governor lineup have fueled talk that the Fed could cut rates several more times before the year is out.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the Australian dollar and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
AUD/USD, which recently broke out of its months-long uptrend, bottomed at .6425 near the 100 SMA on the daily chart.
Since then, it’s bounced to around .6550, which lines up with the 50% Fib retracement of late July’s slide and the old channel support that could now act as resistance.
A run of bullish candles above .6525 could put the uptrend back in play, with room to revisit key levels like the .6600 handle.
But if the pair stalls and turns lower from that broken support, it could be on its way back to the August lows near .6425, or even to fresh Q3 lows.
Whichever bias you end up trading, don’t forget to practice proper risk management and keep up with the potential top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
