The Australian Dollar often mimics the movement of gold, specifically in relation to the US Dollar this has been the case in recent years. However, this is not the case at the moment – the AUD/USD currency pair has not kept up with the increase in gold to a new historical high.

One reason could be the good inflation data from the United States, which allows for the legitimate hope that the Fed’s interest rate cycle will come to an end.

AUD/USD trading around the 200-day line On Friday, the currency pair was able to gain again after it had dropped again below the 200-day line in the preceding days.

In the following chart, this moving average is shown as a blue line. It serves as real-time support and resistance, even if a cross movement upwards or downwards looks a bit stronger at first glance. The fact is that since February, the Australian Dollar has been trading back and forth against the US Dollar in a narrow trading range between 0.647 and 0.69.

This trading range became narrower in the third quarter. Currently, the currency pair is trading between 0.66 and 0.69.

In the figure, these zones are inserted as a light green support zone and a light orange resistance area.

Figure 1: Chart analysis of the Australian Dollar to the US Dollar. The daily chart is displayed.

Source: aktienscreener.com

Double top and double bottom point to sideways trend Twice the rise ended in the area of 0.69. These two highs form a double top. Normally, if the low between these two highs is broken, it should go down strongly. However, since this area is a massive support zone, a double bottom could emerge at the low point on Friday, pointing upwards again. The highs or lows do not have to come exactly at the same level. Near the first high or low is already sufficient.

This is the case with the two lows. I assume that the Australian Dollar to the US Dollar will move back and forth between the highlighted zones until the end of the year – I thus predict a continuation of the current sideways trend.

Support zone could be tested again The seasonality still leaves the legitimate hope that the AUD/USD currency pair will fall back to the area between 0.6600 and 0.6630 before rising again.

In the figure below, the seasonal forecast for the next 50 days is shown. Until mid-December it should seasonally first go down, then up to January 7 next year, followed by a sideways trend that could last until mid-February.

Figure 2: The seasonality of the Australian Dollar to the US Dollar for the next 50 days is displayed.

Source: Bopp Kapitalmarktstudien

Conclusion: Those who want to trade this currency pair short-term could be well served by opening a long position when it falls back into the support zone and holding it up to the resistance area. There it is recommended to close the position and possibly open a new short position.

However, I have to consider that the US central bank decides on the further procedure with regard to interest rates this week. This could lead to massive volatility that could make an appropriate position dangerous.