CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

AUD/USD technical analysis: respecting the levels

By Nathan Batchelor

15:58, 7 October 2020


The Australian dollar has staged a strong reversal against the US dollar over recent days, as increasingly positive risk sentiment helped the pair recover more than 200 points from the 0.7000 level.

AUD/USD analysis shows that the pair could advance towards the 0.7400 area if the 0.7200 resistance level is broken.

AUD/USD medium-term price trend

The AUD/USD pair largely failed to react to this week's RBA policy decision, as the central bank kept monetary policy unchanged as expected.

AUD/USD technical analysis shows that 0.7200 is increasingly important over the medium term. The 0.7200 level is the 50 per cent Fibonacci retracement of the September high to low, and the current October high.

AUD/USD technical analysis

Bollinger Band analysis on the daily time frame also highlights 0.7200 as technically important, with the 20-period simple moving average, or mid-band, located around that level. Gains above 0.7200 could provoke a technical test towards the upper Bollinger Band on the daily time frame, around 0.7400.

Traders should note that major trendline resistance from a rising wedge pattern is also seen around the 0.7400 area. 

What is your sentiment on EA?

Vote to see Traders sentiment!


26,493.25 Price
-0.650% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 60.00


1,963.74 Price
-0.080% 1D Chg, %
Long position overnight fee -0.0185%
Short position overnight fee 0.0103%
Overnight fee time 21:00 (UTC)
Spread 0.30


0.53 Price
-0.660% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.00411


14,479.10 Price
-0.140% 1D Chg, %
Long position overnight fee -0.0255%
Short position overnight fee 0.0032%
Overnight fee time 21:00 (UTC)
Spread 1.8

AUD/USD short-term price trend

AUD/USD technical analysis highlights that the pair is bearish over the short term, while the price trades under 0.7130.

The one-hour time frame shows that a bullish inverted head-and-shoulders pattern will be activated if the price moves above 0.7200. Analysis highlights that this bullish pattern holds an upside projection of more than 70 points.

AUD/USD technical analysis

Key short-term support for the AUD/USD pair is seen at the 0.7130, 0.7110 and 0.7080 levels.

AUD/USD technical summary

AUD/USD analysis shows that the pair could rally sharply over the short to medium-term if the 0.7200 resistance level is broken.

Markets in this article

0.66971 USD
-0.00171 -0.250%

Rate this article

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 535.000+ traders worldwide that chose to trade with

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading