AUD/USD has been quite trendy in recent weeks as global trade tensions increase and risk assets such as the Aussie keep tumbling. Although, we saw a reversal higher towards the end of last week after the soft US manufacturing and services reports. But the sentiment is still negative and forex traders don’t want to keep buying the AUD, so the price action this week has been mostly sideways.
AUD/USD has traded in a range all week and the range is between two moving averages as we can see from the H4 chart above. At the bottom of the range we have the 50 SMA (yellow), which has provided resistance in previous weeks when this pair was sliding lower, and now it has turned into support.
At the top, we have the 100 SMA (green) which has been providing resistance all week and the price is still trading around there now. The stochastic indicator is overbought which means that this latest bullish move might be over soon, but the risk tones this morning are slightly positive as we can observe from the climb in USD/JPY or the stock market, so there might be a break higher as well. Although, that will be short lived since markets have priced in a rate cut from the Reserve Bank of Australia next week. So, I don’t think anyone will want to remain long on AUD for too long.