USDAUD unable to break through key resistance level
US Dollar/Australian Dollar (USDAUD) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
USDAUD finished Tuesday at 1.3965 losing 74 pips (-0.53%). Closing below Monday's low at 1.3986, the forex pair confirmed its breakout through the prior session low after trading up to 33 pips below it intraday.
Daily Candlestick Chart (USDAUD as at Aug 04, 2020):
Tuesday's trading range has been 120 pips (0.86%), that's slightly below the last trading month's daily average range of 129 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for USDAUD.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on July 29th, USDAUD lost -0.09% on the following trading day.
Unable to break through the key technical resistance level at 1.4043 (R1), the pair closed below it after spiking up to 1.4073 earlier during the day. The failure to close above the resistance might increase that levels significance going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could speed up should prices move below the nearby swing low at 1.3837 where further sell stops might get activated. 2019's low at 1.3708 is within reach and we could see further downside momentum should the FX pair break out beyond.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for USD/AUD. Out of 505 times, USDAUD closed lower 54.06% 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 three trading days, showing a win rate of 53.47% with an average market move of -0.03%.