AUD/USD has been pacing back and forth inside its range since March, but it seems to be considering a breakout soon.
As you can see from the 4-hour chart below, the pair has been hovering around the resistance at the .6800 handle for quite some time.
Now this marks its fourth attempt to bust through the ceiling in the past couple of months. Will it finally succeed this time?
AUD/USD 4-hour Forex Chart by TV
If it does sustain a bullish break, price might be in for a rally that’s at least the same height as the range pattern.
That’d be roughly 200 pips yo!
But what are technical indicators saying?
Moving averages are still oscillating to reflect sideways price action, but the SMAs appear to be turning higher and the 100 SMA might be going for a bullish crossover.
Stochastic is on middle ground, also signaling consolidation, but pulling higher would confirm a return in upside momentum.
However, if sellers still win out, AUD/USD could retreat to the bottom of its range at the .6600 mark or at least until the area of interest at the middle.
The latter coincides with the dynamic support at the moving averages, which could make it a viable support zone.
Just keep in mind that the U.S. dollar is under some selling pressure lately, as traders are wary of “mild recession” risks, banking contagion troubles, and debt ceiling issues.
In contrast, the Australian dollar has drawn support from a relatively upbeat RBA policy stance, as well as rising gold prices.
Still, a return in risk-off flows could wind up favoring the safe-haven dollar, so better stay on the lookout for major shifts in market sentiment!
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