AUD/USD price analysis: evening star highlights a top

AUD/USD price analysis: We look for US dollar losses to be limited and AUDUSD tallies to fade. Resistance is seen at 0.7380-0.7390

AUD/USD price-analysis                                 

Market highlights from the past week

Friday September 11: global equities made net gains on Monday which helped underpin the Australian currency, although AUD/USD held below the 0.7300 level

Monday September 14: The Reserve Bank remained optimistic over the outlook in the monetary policy minutes, although it again called for a weaker Australian dollar

Tuesday September 15: The Australian dollar was underpinned by solid risk appetite during Tuesday. AUD/USD peaked just above 0.7340 before fading later in the day as equities lost traction and the US currency gained some support

Wednesday September 16: The Federal Reserve reiterated the commitment to getting inflation above 2 per cent to raise the average and forecast no increase in the federal funds rate until at least the end of 2023

Thursday September 17: US Dollar short covering faded during Thursday with the US currency losing ground as underlying sentiment remained weak

AUD/USD price analysis

Let’s 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 0.6795 has been clearly broken. What was resistance is now support

Weekly: We have a 261.8 per cent extension level at 0.7393 (from 0.5506-0.6220). Are we seeing the completion of a fifth wave (Elliott wave)? This would then mean a corrective three-wave pattern lower

Daily: resistance is seen at 0.7380. Posted an evening doji star from the high. This pattern is often seen at the top of a trend and the start of a new downward biasIntraday four-hour: we have an 88.6 per cent pullback level at 0.7390. This is just above daily resistance at 0.7380. The trend of higher lows is seen at 0.7220Outlook: We look for US dollar losses to be limited and AUDUSD tallies to fade. Resistance is seen at 0.7380-0.7390

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Possible trade set-up:

Action: selling at 0.7380 (resistance)

Stop: 0.7415 (above the high)

Target: 0.7220 (higher lows)

Potential return on risk to first target:  R4.5 (reward 160 / risk 35)

Australian Dollar / US Dollar
Daily change
0.68161
Low: 0.67962
High: 0.68261

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FURTHER READING: Market highlights from last week

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