AUD/USD Monthly Opening Range Intact Ahead Of Australia Jobs Report

The jump in net-long interest has helped to alleviate the crowding behavior in AUD/USD as 45.23% of traders were net-long during the previous week, but the tilt in retail sentiment looks poised to persist amid the rise in net-short interest.

With that said, key market trends may keep AUD/USD afloat as it continues to track the opening range for January, but the Relative Strength Index (RSI) continues to deviate with price as the indicator no longer tracks the upward trend established in November.


(Click on image to enlarge)

Image of AUD/USD rate daily chart

Source: Trading View

  • Keep in mind, the AUD/USD correction from the September high (0.7414) proved to be an exhaustion in the bullish trend rather than a change in behavior as the exchange rate cleared the October high (0.7243) in November, with the pair trading to fresh yearly highs throughout December.
  • At the same time, developments in the Relative Strength Index (RSI)showed the bullish momentum gathering pace as the indicator pushed into overbought territory for the first time since September, with the break above 70 accompanied by a further appreciation in AUD/USD like the behavior seen in the first half of 2020.
  • However, a textbook RSI sell signal emerged following the failed attempt to test the March 2018 high (0.7916), with the oscillator still diverging with price as the indicator establishes a downward trend in January.
  • Nevertheless, AUD/USD appears to be stuck in a defined range following the string of failed attempts to test the monthly low (0.7642), with the exchange rate climbing back above the Fibonacci overlap around 0.7720 (78.6% expansion) to 0.7740 (61.8% expansion) as it initiates a series of higher highs and lows.
  • Need a close above the Fibonacci overlap around 0.7720 (78.6% expansion) to 0.7740 (61.8% expansion) to bring the monthly high (0.7820) on the radar, with the next area of interest coming in around 0.7890 (100% expansion) followed by the March 2018 high (0.7916).
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