The AUD/USD pair is currently trading within a multi-week range, with a short-term sideways trend that is expected to continue. Recently, the trading range has narrowed even further, forming a smaller “mini-range” within the larger range.
On the 4-hour price chart, AUD/USD is moving up and down within the range. It is uncertain whether the pair will move higher or lower within the range, as it is currently trading in the middle. A break above the mini-range high at 0.6679 could lead to a continuation up to the range ceiling at 0.6709, while a break below the mini-range low at 0.6625 could result in a move down to the range floor at 0.6590.
The short-term trend remains sideways, and as long as price stays within the range, it is likely to continue fluctuating within it. A decisive breakout of the range would indicate a shift to a more directional mode. An upside breakout is slightly more probable, given the previous bullish trend before the formation of the range.
If there is a breakout above the range ceiling, the next target is at 0.6770, while a breakout below the range floor could lead to an initial target at 0.6521. A decisive breakout would involve a longer-than-average candle breaking out of the range and closing near its high or low, or three successive candles of the same color breaking through the range boundaries.
Targets are determined using technical analysis and the Fibonacci ratio method. A more conservative target is obtained by extrapolating the height of the range by a Fibonacci 0.618 ratio, while a more ambitious target comes from extrapolating the full height of the range.