AUD/USD price analysis: ascending triangle offers an upside bias
AUD/USD price analysis: scope for mild losses but, with the intraday chart highlighting a bullish formation, we look for dips to be bought.
Market highlights from the last week
Monday 29 June: commodity currencies drifted lower on US dollar gains before recovering, as China’s PMI data provided an element of support
Tuesday 30 June: the dollar made net gains into the US open before declining sharply towards the European close, with position adjustment having a significant impact. Selling eased on Wednesday
Wednesday 1 July: US data was stronger than expected which helped underpin confidence in the US and global recovery
Thursday 2 July: the mix of stronger than expected jobs data and underlying coronavirus fears triggered further uncertainty over the outlook and led to choppy trading
Friday 3 July: relatively quiet session with the US holiday (Independence Day)
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. AUDUSD has made a 28% recovery from the base to the June high trade of 0.7064, as risk on appetite continues
Weekly: levels close to the previous swing high of 0.7032 (week 30th Dec 2019) stalled the rally. We have seen mixed trading for the last 4 weeks. Previous support is located at 0.6671
Daily: 261.8% extension level is located at 0.7355 (from 0.5506-0.6213). Mixed trading for the last fifteen (trading) day
What is your sentiment on AUD/USD?
Intraday four-hour: we look to be forming a bullish ascending triangle formation. A break of 0.6977 and the measured move target is 0.7175. trend line support is seen at 0.6842.
Outlook: scope for mild losses but, with the intraday chart highlighting a bullish formation, we look for dips to be bought.
Possible trade setup:
Action: buying at 0.6895
Stop: 0.6835 (below trend line support)
Target: 0.7175 (measured move) and 0.7355 (261.8%)
Potential return on risk to first target: R4.6 (reward 104 / risk 60)
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