Mixed technical signals, fresh near two-year lows – Where can the Australian dollar go next?

May 13, 2022 - 2 weeks ago
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Having fallen somewhat hard during the trading session on Thursday, along with piercing beneath the US$0.6870 support, the Australian dollar is currently rebuilding renewed momentum.

Meanwhile, the US dollar index (US DXY), which tracks the greenback against a basket of its peers, is slowly easing away from the 20-year highs posted at 104.93 and is trading at 104.60 (as of writing).

Based on the technical assessment, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator is negative; however, it is attempting to gain momentum since rejecting from the oversold zone, while the Moving Average Convergence Divergence (MACD) holds a negative signal and supports bullish divergence. The ADX (trend) indicator supports a mild bear trend.

From the rebound, eyes now look towards the region of US$0.6915 resistance and potentially, if breached, expose the US$0.6960 area. Reassess from there.

Conversely, failing to break US$0.6915 overall keeps the downside objective to US$0.6650-90 area before profit-takers return.

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