The AUD/USD has a firm level of support under it, limiting downside risks and creating an area for traders to target for potential consolidation and reverses. The range bound pair makes it attractive for traders looking to scalp profits as it has provided solid entry and exit levels.
Key Technical Levels
The range of 0.8600 to 0.8800 has contained price action over the past week with the lower bound holding as support since 9/8. A converging 20-Day SMA will increase its significance and potential to hold off bearish sentiment. The AUDUSD has experienced periods of consolidation following past tests of the psychological level and future attempts could create similar opportunities. Regardless, the current range will give high frequency traders some comfort that they can execute their strategies successfully.
Quantitative Metrics
A declining ATR for the AUDUSD to 0.0111 makes it one of the lowest of the majors but increasing its attractiveness for scalpers. However, the range represents nearly 1.26% of the spot which is the third highest ratio of the pairs listed below. A wide Bollinger band and an implied volatility of 13.135 are concerns as they demonstrate the potential for a break out.
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To discuss this report contact John Rivera, Currency Analyst: jrivera@fxcm.com
