- Commodity currencies are on the backfoot for the open.
- AUD/USD bears seek a break of interim support.
With the Federal Open Market Committee and headlines regarding the Delta variant, the week ahead will be an important one from both a fundamental and technical perspective.
The watchlist for swing trading FX is heating up as volatility picks up from multi-month lows amidst broad US dollar strength:
With the US dollar smile theory also in play (net dollar value is long for the first time since the pandemic began), the commodity complex is set for a bumpy ride.
This leaves the commodity currency vulnerable, especially the Aussie, considering central bank divergences.
AUD/USD technical analysis
AUD/USD is facing headwinds across the time frames, from the monthly all the way down to the 4-hour chart.
On a monthly basis, the price has broken the monthly old resistance turned support, and the Japanese candlestick is on the path to close bearish at the end of this month:
From a weekly perspective, the candle closed bearish last week ending July 23, which leaves scope for a downside continuation in the days ahead:
On a daily perspective, the price has corrected 50% from the prior bearish impulse near 0.7390 and bears are looking for an imminent optimal short entry point on the lower time frames:
The 4-hour chart shows that the price is on the verge of breaking support below the 21 four-hour Exponential Moving Average (EMA) and, according to the FXStreet Technical Confluence Detector, below various strong confluences that would also be expected to act as resistance:
The FXS Technical Confluences Detector is an in-house tool, developed by FXStreet experts, that allows you to identify those price levels where congestion of indicators like moving averages, Fibonacci levels and pivot points occur. Knowing where these congestion points are located is very helpful as it allows the trader to see these areas of support and resistance easily.
This tool is customizable so you can choose the asset selectors and the time frame that is more suitable for your trading operations.
Other correlated pairs on the watchlist
Meanwhile, we can see similar developments in NZD/USD and AUD/JPY:
AUD/JPY daily chart
- Prior Analysis, 07/23/2021: AUD/JPY Price Analysis: Daily resistance continues to hold
NZD/USD daily chart
- Prior Analysis 07/22/2021: NZD/USD Price Analysis: Bears seeking a daily downside extension
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.