Is the AUD on the cusp of a major move higher?

AUD has reached or surpassed crucial breakout levels against a number of currencies. Could we be on the cusp of a big appreciation for the Australian dollar?

Australian dollar note
Source: Bloomberg

AUD/USD: pre breakout

AUD/USD has been experiencing an increasingly uncertain 2016, with price currently back at the same levels seen seven months ago. The symmetrical triangle evident in recent months portrays a fight between the bulls and the bears, which has yet to be resolved.

However, the knowledge the greenback has been a stellar performer over the recent months alludes to the fact the Aussie dollar is a currency pair which is increasingly strengthening after years of China-fuelled depreciation. Looking across some of the other AUD crosses, it is clear we could be set for a period of substantial strength in the currency.

AUD/USD is perhaps not the best example given it is trading against one of the strongest currencies around. However, this triangle has to break soon and with price testing the upper trendline resistance (five of 11 weeks) much more than the lower boundary (two of 11 weeks), there is reason to believe the pair will break higher. 

AUD/USD weekly price chart

The hourly-chart highlights that we have created a new higher high, for the first time in over two months. This points towards another break higher and ultimately a bullish emergence from this pattern. A bullish outlook remains in play unless we break back below $0.7505. 

AUD/USD daily price chart

AUD/NZD: pre-breakout

AUD/NZD is another pair which is yet to breakout, but has shown good potential. Last week saw the pair tumble following a rally into horizontal and simple moving average (SMA) resistance (50 and 100).

The N$1.0773 mark is crucial here, with a break and close above this level marking the creation of a double bottom formation. Should this come to fruition, the main target would be for a move back to the six-year descending trendline (currently N$1.1250).

AUD/NZD weekly price chart

AUD/CAD: mid-breakout

AUD/CAD is currently at a crucial crossroads, with price resting on trendline and horizontal resistance. This week has created a new two-year high, with price since coming back to the convergence at C$1.0170.

A break through this major area of resistance would also mark the completion of a head and shoulders pattern. A break higher from here could set us on a pathway where there are few notable resistance levels, with the next one in view coming at C$1.0350.

AUD/CAD weekly price chart

AUD/EUR: breakout complete

AUD/EUR is the first of our charts which has already seen the bullish breakout for the AUD. The break and close above €0.6965 provided a bullish signal which has since been followed up so far this week.

It seems like we are set upon a bullish path, which will hopefully provide us with a consistent bullish uptrend for the end of 2016. With the European Central Bank expected to extend QE in December, it comes as no surprise markets are selling the euro across the board.

AUD/EUR weekly price chart

AUD/CHF: mid-breakout

AUD/CHF is similarly breaking higher, with a clearly defined zone of resistance between CHF0.7555 and CHF0.7597 providing a region which has held for 17 months now. A convincing break higher from here provides a bullish spark, with CHF0.7824 providing the next interesting region of resistance. A break higher from here could provide the pair with a strong directional bias for the coming months.

AUD/CHF weekly price chart

Ultimately, the ability to see the AUD break through crucial multi-year resistance across a multitude of pairs would provide us with a stronger bullish signal. Whether looking for short or longer-term plays, a breakout for AUD across the board could provide us with a strong trending market to trade in.

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Denne informasjonen er utarbeidet av IG, forretningsnavnet til IG Markets Limited. I tillegg til disclaimeren nedenfor, inneholder ikke denne siden oversikt over kurser, eller tilbud om, eller oppfordring til, en transaksjon i noe finansielt instrument. IG påtar seg intet ansvar for handlinger basert på disse kommentarene og for eventuelle konsekvenser som et resultat av dette. Ingen garanti gis for nøyaktigheten eller fullstendigheten av denne informasjonen. Personer som handler ut i fra denne informasjonen gjør det på egen risiko. Forskning gitt her tar ikke hensyn til spesifikke investeringsmål, finansiell situasjon og behov som angår den enkelte person som mottar dette. Det er ikke utarbeidet i samsvar med lovens krav for å fremme uavhengighet av investeringsanalyse og som sådan er ansett av å være markedsføringskommunikasjon. Selv om vi ikke er hindret i å handle i forkant av våre anbefalinger, ønsker vi ikke å dra nytte av dem før de blir levert til våre kunder.