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Market update: AUD/USD faces support, AUD/JPY a symmetrical triangle


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The Australian dollar remains pressured after recent losses and AUD/USD closed at its lowest since early November, while AUD/JPY faces a symmetrical triangle.

original-size.webpSource: Bloomberg
 

Daniel Dubrovsky | Currency Analyst, DailyFX, San Francisco | Publication date: Thursday 07 September 2023 

AUD hits new low against the USD

The Australian dollar closed at its weakest against the US dollar since early November, opening the door to extending the broader downtrend since the beginning of this year. This is being reinforced by a Bearish Death Cross between the 20- and 50-day moving averages (MAs) from August, with the former line recently holding as resistance.

However, AUD/USD faces positive relative strength index (RSI) divergence. This is a sign of fading downside momentum, which can at times precede a turn higher. Still, in such an outcome, the MAs could hold as resistance, maintaining the downside technical bias. Otherwise, extending lower places the focus on the 3 November low of 0.6272 before the 2022 bottom of 0.6170 kicks in.

AUD/USD monthly chart

 

original-size.webpSource: TradingView

AUD/JPY technical analysis

Meanwhile, against the Japanese yen, the Australian dollar is facing a different technical situation. A symmetrical triangle chart formation has been brewing since earlier this year. Now, AUD/JPY is quickly running out of space to consolidate between rising support and falling resistance. The direction of the breakout could be key for preceding the broader trend.

In the event of an upside breakout, key resistance is the 23.6% Fibonacci retracement level of 94.93. Extending gains could open the door to revisiting the June high of 97.67. Otherwise, key support is the 38.2% level of 93.23. Below the latter sits the midpoint at 91.86. A stronger bearish technical conviction could see the exchange rate drop towards the 61.8% level of 90.49.

AUD/JPY monthly chart

 

original-size.webpSource: TradingView

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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