Top Story

Coiling AUD/USD set for upside range expansion?

The AUD/USD has been coiling for a few weeks now. The bodies of the weekly candlestick bars have been getting smaller as price tested long-term support around 0.7650. This was formerly a major resistance level. In addition, it is also where a long-term bullish trend line comes into play. Thus, the fact that the AUD/USD is holding above this level is significant. Could we now see some range expansion to the upside?

Well, judging by the price action on the daily chart, the move could be in motion already. Today the Aussie has probed liquidity on both sides of Friday’s range. First, it testing liquidity below Friday’s low and once it was clear that the supply was limited there, the buyers stepped in and drove the unit to above Friday’s high and short-term resistance at 0.7700. If there’s now acceptance above this level then we may see a nice move higher over the coming days. But failure to hold above this level would be a major warning sign for the bulls.

In terms of resistance, 0.7720 is an interesting level to watch in that it was formerly support and resistance. If the Aussie were to break above here then there’s little further resistance seen until 0.7780. Above this area is the convergence of the 50- and 200-day moving averages at 0.7805, followed by 0.7850, a level which was the last support prior to the breakdown.

Meanwhile if support at 0.7650 were to break down now then this could lead to a sizeable drop, with the first bearish objective in this case being the prior lows at 0.7530.  


Source: eSignal and FOREX.com.

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.