AUDUSD has a neutral to bullish bias in the short-term. The key 0.8000 level has proven to be a strong resistance level and will be quite a challenge to break. Daily momentum indicators such as RSI and MACD are pointing to a neutral outlook.
AUDUSD has been trading sideways within a broad range between 0.7890 and 0.8000 since a sharp rebound in mid-August off lows of 0.7807. Lack of upside momentum led to a consolidation phase. A horizontal MACD and RSI are highlighting a lack of clear direction in the market.
Prices spiked to a high of 0.8028 yesterday but retreated quickly to drop back below what is now a key resistance level at 0.8000. Support is at the bottom of the recent range at 0.7890 which is defined by the 23.6% Fibonacci retracement level of the upleg from 0.7328 to 0.8065 (May to July rise).
A break out of the range to the downside would target 0.7781 support (38.2% Fibonacci). A deeper decline below 0.7694 (50% Fibonacci) would change the bias to bearish.
While the short-term outlook for AUDUSD is neutral, there is room for a move to the upside as the pair is trading close to the upper end of the range. A sustained break above 0.8000 would turn focus to the upside to see a re-test of 0.8065 (a more than 2-year high). Such a move would strengthen the bullish bias to resume the uptrend from 0.7328.
AUDUSD is expected to trade sideways in the short-term. But the overall technical picture on the daily chart is neutral to bullish, with the crossover of the 50-day moving average over the 200-day MA indicating the uptrend from 0.7694 is still intact with no signs of a reversal.
