- AUD/USD is trading in the middle of a multi-week range.
- It is in a short-term sideways trend that is expected to extend.
- More recently, it has contracted further, forming a “mini-range” within a range.
AUD/USD continues to trade up and down within a range on the 4-hour price chart. Since June 19, the buying and selling waves have narrowed further, forming a sort of temporary “mini-range” within a range.
AUD/USD 4-hour chart
AUD/USD could move both up and down within the range – at this point it is difficult to say which direction it will go. A break above the mini-range high at 0.6679 would likely indicate a continuation to the range top at 0.6709. Likewise, a break below the mini-range low at 0.6625 would likely lead to a move down to the range floor at 0.6590.
The short-term trend is sideways and as long as the price remains within the limits of the range, it will probably continue to go up and down, extending the trend – “the trend is your friend.”
A decisive breakout of the range would be required to signal a shift to a more directional mode. A breakout to the upside is marginally more likely because the trend before the range formation was bullish. The breakout move will likely be volatile given that the range’s highs and lows have been touched multiple times.
A decisive break above the range top would see a continuation towards a conservative target at 0.6770; A decisive break below the range floor would indicate a continuation towards an initial target at 0.6521.
A decisive breakout would be one in which a longer-than-usual candle breaks the range and closes near its high or low, or three successive candles of the same color cleanly break the top or bottom of the range.
Targets are generated using the technical analysis method of extrapolating the height of the range by a Fibonacci ratio of 0.618 higher (in the case of an upward breakout) or lower (in the case of a downward breakout). A more generous goal would come from extrapolating the full height of the range.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
