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Market update: Australian dollar could rebound a bit; AUD/USD, EUR/AUD, GBP/AUD price set-ups


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The AUD/USD attempts to form a temporary base, although the consolidation/correction in EUR/AUD and GBP/AUD may not be over yet.

 

original-size.webpSource: Bloomberg

 

 Manish Jaradi | IG Analyst, Singapore | Publication date: Monday 11 September 2023 07:48

AUD/USD: Growing odds of a minor rebound

After an initial attempt to break higher in late August, AUD/USD is back around its August lows. However, a new/minor high created at the end of last month raises the prospect of AUD/USD retesting the 200-period moving average on the 240-minute charts (now at about 0.6500).

Zooming out, in recent weeks, AUD/USD has been attempting to hold above quite strong support on a downtrend line from the end of 2022. Any break above the August 30 low of 0.6525 could indicate the start of a material consolidation. That’s because, on higher timeframe charts, including the weekly charts, AUD/USD is looking oversold and is showing tentative signs of fatigue.

AUD/USD 240-minute chart

 

original-size.webpSource: TradingView

EUR/AUD: Consolidation within a broadly bullish phase

The failure of EUR/AUD to resume its uptrend last week could be a sign that the consolidation that started last month isn’t over. EUR/AUD retreated from near a tough hurdle at the end-August highs of around 1.6880, coinciding with the upper edge of the Ichimoku cloud on the 240-minute charts.

The cross is now testing a vital floor area: the 200-period moving average, slightly above a horizontal trendline since August (at about 1.6635). Any break below 1.6635 could raise the odds of further losses, initially toward 1.6450.

EUR/AUD 240-minute chart

 

original-size.webpSource: TradingView

GBP/AUD: Testing a crucial cushion

GBP/AUD is testing a crucial converged cushion: the 200-period moving average, coinciding with a horizontal trendline from the end of August (at about 1.9450), not too far from an uptrend line from June. A hold above the support area is key for the uptrend to resume.

To be sure, a break below isn’t imminent, but any break below would point to an extended consolidation with a slightly weak bias. On the upside, GBP/AUD would need to break above last week’s high of 1.9750 for the bullish bias to resume.

GBP/AUD 240-minute chart

 

original-size.webpSource: TradingView

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