AUD/USD Price Analysis: The end is near for volatility contraction, 200-EMA is a critical hurdle
28.06.2022, 06:12

AUD/USD Price Analysis: The end is near for volatility contraction, 200-EMA is a critical hurdle

  • The Symmetrical Triangle formation is advocating a squeeze in volatility going further.
  • Aussie bulls have faced barricades around the 200-EMA at 0.6950.
  • The RSI (14) is oscillating in a 40.00-60.00 range which signals a consolidation ahead.

The AUD/USD pair is displaying an inventory distribution structure in a narrow range of 0.6918-0.6936 in the Asian session. The major has auctioned sideways in the entire Asian session and is expected to continue its sideways streak further till the occurrence of any potential trigger that will bring a decisive move in the asset.

On an hourly scale, the asset is forming a Symmetrical Triangle that signals for a volatility contraction followed by a breakout in the same. The upward sloping trendline is placed from Thursday’s low at 0.6868 while the downward sloping trendline is plotted from June 21 high at 0.6994.

The 200-period Exponential Moving Average (EMA) at 0.6950 has acted as a major hurdle for the aussie bulls.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a range of 40.00-60.00, which indicates a rangebound move ahead.

A decisive move below Thursday’s low at 0.6868 will activate the downside break of the above-mentioned chart pattern, which will drag the asset towards May 12 low and the round-level support at 0.6829 and 0.6800 respectively.

Alternatively, the aussie bulls could dictate the asset price if the major overstep Wednesday’s high at 0.6962. This will drive the asset towards the psychological resistance at 0.7000, followed by June 13 high at 0.7035.

AUD/USD hourly chart

 

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