AUD/USD price analysis: dips continue to attract buyers
AUD/USD price analysis: dips continue to attract buyers. With strong support seen at 0.6967, we look to buy a pullback
Market highlights from the past week
Tuesday July 14: the Australian dollar briefly came under pressure on Tuesday, but gradually secured net gains in choppy trading as US dollar weakness dominated in New York trading
Wednesday July 15: China’s GDP data failed to support the Australian dollar with AUD/USD settling just below 0.7000 as Chinese and global equity markets moved lower
Thursday July 16: the Australian dollar stabilised on Monday with AUD/USD around 0.6985 despite reservations over the domestic coronavirus situation and mixed equity-market trends
Friday July 17: commodity currencies were unable to make headway given fears over the implications of US coronavirus cases
Monday July 20: risk appetite was boosted by hopes for coronavirus vaccine headway and very supportive monetary policies
AUD/USD price analysis
Let us have a look at the technical viewpoint.
Monthly: traded to a multi-year low of 0.5506 in March. The trend of lower lows at 0.6858 has been clearly broken
Weekly: levels close to the previous swing high of 0.7032 (week of December 30, 2019) stalled the rally. This level is under pressure once more.
Daily: mixed trading for the past 28 days. We have a 161.8 per cent extension level located at 0.7022 (from 0.5506-0.6445)
What is your sentiment on AUD/USD?
Intraday four-hour: possibly forming an ending wedge pattern. Trend line support is located at 0.6767. Bespoke support is located at 0.6967
Outlook: dips continue to attract buyers. With strong support seen at 0.6967, we look to buy a pullback. The medium-term bias is neutral
Possible trade setup (good until July 24):
Action: buying at 0.6967 (trend line support)
Stop: 0.6947 (a break of the wedge)
Target: 0.7037 (swing high)
Potential return on risk to first target: R3.5 (reward 70/risk 20)
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