AUDUSD has a neutral bias after pausing a rally that took the pair to a high of 0.8065 on July 27. This is the highest level since May 2015. The underlying market structure is bullish after a sharp rise from the July 7 low of 0.7571. Looking at the 4-hour chart, upside momentum has faded as indicated by the flat RSI. Consequently, AUDUSD is trading sideways within a range.
The key psychological level at 0.8000 is now a strong resistance level broadly holding so far even though it was pierced last week. AUDUSD closed below 0.8000 on July 28. Support is provided by the 50-period moving average (MA). This is close to a Fibonacci level at 0.7947 (23.6% retracement of the upleg from 0.7571 to 0.8065). Further support is provided by subsequent Fibonacci levels at 0.7875, 0.7816 (July 26 low) and 0.7759.
Prices need to rise above the key 0.8000 level to move out of the range and weaken downside pressure. From this level, AUDUSD would see a re-test of the 0.8065 high and a break of this would see a resumption of the uptrend.
The positively aligned moving averages are supporting a bullish outlook in the short-term. There was a bullish crossover of the 20-period MA with the 50-period one on July 12.
There has been no confirmation of a trend reversal yet and the current consolidation pattern could be a temporary pause before the uptrend resumes. For now, the bias remains neutral on the 4-hour chart, with high odds of a shift to bullish if there is a daily close above 0.8000.
