- AUD/USD eases from a one-and-half-week high touched earlier this Thursday.
- The overnight breakout through a descending channel favours bullish traders.
- Investors keenly await the Jackson Hole Symposium before placing fresh bets.
The AUD/USD pair struggles to capitalize on its weekly gains and retreats a few pips from a one-and-half-week high touched during the Asian session on Thursday. Spot prices currently trade around the 0.6475 region, down less than 0.10% for the day, as traders now look to the crucial Jackson Hole Symposium before placing fresh directional bets.
In the meantime, concerns about the worsening economic conditions in China, along with rising bets for another on-hold decision by the Reserve Bank of Australia (RBA) in September, continue to act as a headwind for the Aussie. The US Dollar (USD), on the other hand, is seen consolidating the overnight retracement slide from its highest level in more than two months and lending some support to the AUD/USD pair.
From a technical perspective, the overnight breakout through a downward-sloping channel extending from the monthly peak was seen as a fresh trigger for bulls. Moreover, oscillators on hourly charts are holding in the positive territory and support prospects for additional gains. That said, it will still be prudent to wait for a sustained strength beyond the 0.6500 psychological mark before placing fresh bullish bets.
The aforementioned handle coincides with the 100-period Simple Moving Average (SMA) on the 4-hour chart and should act as a pivotal point. Some follow-through buying should pave the way for an extension of the recent recovery from the YTD low touched last week and lift the AUD/USD pair further towards the 0.6530 region en route to the 0.6570-0.6575 horizontal barrier and the 0.6600 round-figure mark.
On the flip side, the 0.6455-0.6450 area now seems to protect the immediate downside ahead of the 0.6425-0.6420 zone and the 0.6400 mark. A convincing break below the latter will expose the YTD low, around the 0.6365 zone, below which the AUD/USD pair could eventually slide to the 0.6300 mark, representing the downside target of the bearish double-top chart pattern formation near the 0.6900 mark.
This is followed by the 0.6270 area or the November 2022 trough. Some follow-through selling might turn the AUD/USD pair vulnerable to accelerate the downfall further towards the 0.6200 round-figure mark.
AUD/USD 4-hour chart
-638284377464271117.png)
Technical levels to watch
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 treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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.