AUD/USD Price Analysis: Sat plumb in the middle of a multi-week range

AUD/USD continues trading up and down within a range on the 4-hour price chart. Since June 19 the waves of buying and selling have narrowed even further, forming a sort of temporary “mini-range” within a range. 

AUD/USD 4-hour Chart

AUD/USD could move either higher or lower within the range – at the moment it is difficult to tell which way next. A break above the mini-range high at 0.6679 would probably indicate a continuation up to the range ceiling at 0.6709. Likewise a break below the mini-range low at 0.6625 would probably lead to a move down to the range floor at 0.6590. 

The short-term trend is sideways and as long as price remains within the bounds of the range it will likely keep ping-ponging up and down, extending the trend – “the trend is your friend”. 

It would require a decisive breakout of the range to signal a change to a more directional mode. An upside break is marginally more likely to happen because the trend prior to the formation of the range was bullish. The breakout move is likely to be volatile given the range highs and lows have been touched multiple times. 

A decisive break above the ceiling of the range would see a follow-through to a conservative target at 0.6770; a decisive break below the range floor would indicate a follow-through to an initial target at 0.6521. 

A decisive break would be one in which a longer-than-average candle broke out of the range and closed near its high or low, or three successive candles of the same color broke cleanly through the range top or bottom. 

The targets are generated using the technical-analysis method of extrapolating the height of the range by a Fibonacci 0.618 ratio higher (in the case of an upside break) or lower (in the case of a downside break). A more generous target would come from extrapolating the full height of the range.