Could AUD/USD finally breakout next week?

We have seen a number of dollar pairs break out of their consolidative ranges recently. With the RBA rate decision, FOMC minutes and US monthly jobs report all to look forward to next week, there is a possibility that the AUD/USD may be the next one to make its move.

As can be seen from the daily chart, the Aussie has been oscillating around its 200-day moving average to reside inside the converging trend lines since the beginning of 2016. The lengthy consolidations means that the eventual breakout could be significant in terms of magnitude. The key resistance area that needs to break is at 0.7700-0.7750. A clean break above here could pave the way towards 0.7835 ahead of 0.8000 next.

Meanwhile the monthly chart of the AUD/USD reveals that the consolidation has left clean highs around 0.7750, above which I am expecting lots of buy stop orders to be resting. Thus if the AUD/USD were to climb above this level, then I would be anticipating a sharp short-squeeze rally.

Meanwhile on the downside, the key support levels to watch are at 0.7622/35 and around 0.7550, levels which were formerly resistance. I would maintain a bullish view on this pair while price holds above these levels.  

Source: eSignal and FOREX.com

Source: eSignal and FOREX.com

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