The AUD/USD has been coiling for several sessions, and the EUR/AUD has been trading in a tight range during this period as well. Let’s take a look at their short-term charts and get ready for imminent breakouts.
Last week, AUD/USD fell to a new low on the year at 0.8107. Since then, the market has been consolidating. It continues to make lower highs, but has made a higher low as well, making it somewhat of a triangle congestion.
If AUD/USD were to develop a bullish correction, or a consolidation that extends longer than just a week, we should see a break above 0.82 and the 1H RSI pop up above 60, preferably even above 70 to show some bullish momentum in the near-term.
For now, even though there seems to be consolidation, the mode is still bearish as price trades under the 200-, 100-, and 50-simple moving averages (SMAs), and as the 1H RSI holds below 60. Therefore, the pressure remains towards the 0.81-0.8110 area heading into the Christmas holiday.
The EUR/AUD is also in consolidation:
Last week, the EUR/AUD retreated from about 1.5330 down to about 1.4980. This was a relatively strong bearish correction, but after in the past few sessions, the pair has entered a tight consolidation range between 1.4978 and 1.5074.
A break above 1.5075 should open up the 1.5175 area, with risk of returning to the 1.5330 high. The bullish outlook would be favored further if the 1H RSI pops up above 60. Also, if there is a pullback and the market starts holding above 1.5020 (middle of the range), then the bullish continuation outlook would strengthen.
A break below 1.4975 would suggest further bearish correction. There is a support/resistance pivot area around 1.4850, which could be the very short-term target of a bearish breakout. A more aggressive outlook could be considered if subsequent rallies fizzle. Then, the daily chart suggests strong support in the 1.46-1.47 area, which is where we would have to limit a bearish outlook given the bullish nature of EUR/AUD since September.
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