Technical Analysis – AUDUSD in tight range; decisive breakout needed
However, the subdued Average Directional Movement Index (ADX) confirms the current range-trading theme, and the RSI is just a tad below its 50-threshold. In addition, the usually volatile stochastic oscillator is hovering below its moving average but appears to be moving sideways now. More interestingly, there is a convergence of the simple moving averages (SMAs), just above the current AUDUSD pricing, that is usually associated with an imminent move.
Should the bears manage to break the current rectangle, they would quickly come up against the 23.6% Fibonacci retracement of the April 5, 2022 – October 13, 2022 downtrend at 0.6521. The path then appears to be clear until the November 3, 2022 low of 0.6271.
On the other hand, if the bulls decide to take market control, they will try to clear the busy 0.6681-0.6706 area populated by the 50- and 200-day SMAs, and the July 14, 2022 low. They would then aim for 0.6739, before setting their eyes on the key 0.6781-0.6797 range, where the upper boundary of the rectangle lies.
To conclude, AUDUSD range-trading continues as market participants remain on the sidelines. A sizeable move appears to be on the cards, but a rectangle breakout is needed first.Related Assets
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