AUD/USD: working over-time!

The AUD/USD is making decent upward progress despite living under the spectre of further RBA rate cuts as well as trading against a stronger US$. It has broken back above the key 0.72 level and in this post I look at other levels that are worth monitoring.

A/U monthly: When you look at the monthly chart you can see that price is battling it out at the junction of a long-term S/R zone and the fibs of two major monthly-chart based swing high moves. These fibs are highlighted on the chart and show the:

  • 61.8% fib of the major swing high move from 2000 to 2011 near 0.72 and
  • 78.6% fib of the 2008-2011 swing high move near 0.71.

This is a major region for this pair and any break away and hold above 0.72 would be bullish:

AUmonthlyCloud

A/U weekly: any hold above 0.72 would then need to negotiate the 0.74 region and the weekly chart below shows this as an area of previous S/R as well:

AUweekly

A/U daily: the condensed daily chart shows that any 61.8% fib retracement of the latest swing low move (2011-2016) would take price up to the 0.945 level and this is also a region of previous S/R and so is well worth watching. (highlighted on chart).

AUdaily

A/U 4hr: the condensed 4hr chart shows price has been trading in a sideways wedge of sorts for almost 6 months but is currently back up under the top trend line here. Note how this trend line is just under the 0.74 level though! Thus, watch for any make or break of this trend line and 0.74 region:

AU4

Putting fibs on this 4hr swing low move shows the 61.8% fib near 0.765 which is also previous S/R (highlighted) and this would make a decent target for any bullish break and hold above 0.74:

AU4

The AUD/USD trades as a function of US$ sentiment as much as RBA jawboning though and any successful and continued rally with the US$ up to and/or past the 100 level would put pressure on the AUD/USD pair:

USDXweekly

US$ weakness would help to support this pair and one would expect the RBA to start their jawboning, at a minimum, again if the AUD/USD accelerated with such a move. Thus, every bit of ground this pair makes is rather noteworthy!

Oil: Oil is threatening a breakout from a 19 month bear trend line and any success here would help to support the AUD$ so keep an eye on this commodity:

OilDaily

Summary:

The AUD/USD is up trading just under a 6 month wedge trend line and the 0.74 S/R region so watch for any make or break of this resistance zone. A bullish breakout would have me watching, apart from obvious whole-number levels, the 0.765 and, then well beyond that, the 0.945 level.

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