Australian Dollar Price Action Setups: AUD/USD, EUR/AUD, GBP/AUD

The Australian dollar was the strongest major currency on Monday after concrete steps from the US Senate to potentially end the government shutdown boosted risk appetite. The US dollar lost some of its safe-haven appeal, slipping against the British pound, Canadian dollar, and Japanese yen. The return to risk saw the Aussie rise across the board, with traders refocusing on a less-dovish RBA stance ahead of Thursday’s employment report.

Chart analysis by Matt Simpson - source: LSEG

View related analysis:

AUD/USD, EUR/AUD, and GBP/AUD Technical Setups

AUD/USD Technical Analysis: Australian Dollar vs US Dollar

In yesterday’s weekly AUD/USD outlook, I outlined a bias for the Aussie to rise toward the monthly pivot point at 0.6537 before reversing lower. However, given recent developments, there is now potential for AUD/USD to extend higher after a minor pullback.

The daily chart shows a firm close above the 0.6520 support and a strong rebound from the October close low, shifting the bias toward the October VPOC and potentially the 0.66 handle.

That said, a small bearish divergence has appeared on the 1-hour chart, with prices meeting resistance at the monthly pivot point. A short retracement within Monday’s range could precede the next leg higher if bullish momentum resumes.

Chart analysis by Matt Simpson - source: LSEG

EUR/AUD Technical Analysis: Euro vs Australian Dollar

Last week, I outlined a bullish scenario for EUR/AUD on the daily chart after it printed an elongated bullish range expansion candle above key support levels. Previously, this pattern had seen the cross rise toward the top of its range, though Monday’s price action reversed the tables somewhat.

Friday’s shooting star candle produced a false break above the 100-day EMA, hinting at a swing high around the midpoint of the established sideways range. The daily RSI (2) also confirmed overbought conditions before Monday’s reversal lower. A three-candle bearish formation — an evening star reversal — has now completed.

Given the renewed appetite for risk, which typically favours the Australian dollar over the euro, a retest of the range lows around 1.7590 appears likely. A break beneath this level would suggest a broader topping pattern is in play and could pave the way for a move toward the May low near the 1.72 handle.

Chart analysis by Matt Simpson - data source: TradingView EUR/AUD

This image will only appear on forex websites!

GBP/AUD Technical Analysis: British Pound vs Australian Dollar

The British pound has remained in a well-defined downtrend against the Australian dollar since the April high. A spinning top doji formed on Friday near the 20-day EMA, and Monday’s bearish candle confirmed it as a lower high.

While GBP/AUD has found interim support around the February high, a retest and potential break below the 2.00 handle remain the favoured scenario given the prevailing bearish structure. The February Volume Point of Control (VPOC) at 1.9794 becomes the next downside target if price action extends beneath 2.00.

Chart analysis by Matt Simpson - data source: TradingView GBP/AUD

View the full economic calendar

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

FOREX.com is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment and CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.forex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.forex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 42.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.