technical analysis AUDUSD

Technical analysis of AUDUSD

The Aussie dollar has continued to move up against its American counterpart so far today in the aftermath of much stronger job data than expected. March’s employment change from Australia came in at 70,700, more than double the consensus, while the rate of unemployment in Australia declined to 5.6% against the consensus of 5.7%. This technical analysis of AUDUSD looks at areas of possible importance on the daily chart ahead of American retail sales and industrial data this afternoon GMT.

The clear high resistance on this chart is the latest high slightly below 80 US cents, the next key psychological area. Low support is less obvious, but the area slightly above the lower psychological area of 75c which has been tested twice since early February might resist testing again.

Technical indicators on AUDUSD D1

 

Moving averages continue to give a buy signal, with each of the 50, 100 and 200 SMAs successively above slower lines. However, the 50 SMA has closed the gap with the 100 over the last few weeks and might produce a death cross if the current test by the price fails. Another daily close above either or both of the 50 and 100 SMAs might confirm continuation upward.

There is no sign of saturation from Bollinger Bands (50, 0, 2) but the slow stochastic (15, 5, 5) at about 81 is slightly within the trigger zone for overbought. At the time of writing volumes does not give a clear signal.

Price action and Fibonacci

 

The channel down from 25 February now seems to have been broken conclusively to the upside, so the main signal from traditional patterns in the short term is buy. On the other hand, looking a bit further back demonstrates a rectangular pattern from around 21 December to the latest high just below 80c, so strong momentum and continuation above the latest high look unfavourable for now.

The 50% area of the weekly Fibonacci fan is in clear focus as a trendline this month. Price has now moved back above this line and could receive dynamic support in its area. Focus on the 38.2% zone of the fan would project a high of around 82.5 cents at the end of April, but as noted above behaviour around the latest high just below 80c is crucial.

Technical analysis of AUDUSD: summary

 

This afternoon’s American data include retail sales for March, which are expected to rebound to about 5.9% growth, plus annual industrial and manufacturing production and the usual initial jobless claims. These data are unlikely to overshadow the morning’s strong release from Australia unless they’re also very positively surprising.

More gains for the Aussie dollar seem to be likely into next week based on TA. However, the upside in the next couple of days might be limited given the current weak overbought signal.

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