USDAUD finds buyers around 1.6166 for the forth day in a row
US Dollar/Australian Dollar (USDAUD) Technical Analysis Report for Apr 01, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, USDAUD ended Wednesday at 1.6469 gaining 169 pips (1.04%). Trading up to 134 pips lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on March 19th, USDAUD actually lost -1.10% on the following trading day. Closing above Tuesday's high at 1.6466, USD/AUD confirmed its breakout through the prior session high after trading up to 93 pips above it intraday.
Daily Candlestick Chart (USDAUD as at Apr 01, 2020):
Wednesday's trading range has been 393 pips (2.41%), that's slightly below the last trading month's daily average range of 532 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for USDAUD.
Prices are trading close to the key technical support level at 1.6129 (S1). Prices are trading close to the key technical resistance level at 1.6706 (R1). The pair was bought again around 1.6166 after having seen lows at 1.6093, 1.6168 and 1.6129 in the last three trading sessions. Obviously there is something going on at that level.
While the currency is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might accelerate should prices move below the close-by swing low at 1.6093 where further sell stops could get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous three Lows" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for USD/AUD. Out of 28 times, USDAUD closed lower 64.29% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 67.86% with an average market move of -0.03%.