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AUD/USD Options-derived Trading Range Relative to Eyed Technical Levels

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In the following table, we’ve listed levels of implied volatility (IV) for major USD-pairs for the next one-day and one-week time-frames. Using these levels, we’ve derived the range-low/high prices from the current spot price within one-standard deviation for specified periods. Statistically speaking, there is a 68% probability that price will remain within the lower and upper-bounds.

One-week implied volatility points to a 1-standard deviation range of 7939-8155, top-side in alignment with overhead levels.

On Friday, AUDUSD traded into a long-term resistance zone we’ve discussed previously in one of the weekly webinars. The zone extends from around 8060 up to around 8160, and dates back to lows in 2010 as well as a swing-high on a bounce back in May 2015. The price action on the final day of last week was telling, with the carving out of a reversal-bar – a clear rejection of noted overhead levels. This may only be a pause, but buyers have their work cut out for them if they are to forge new cycle highs. The one-week projected high clocks in at 8155, right near the swing-high peak in May 2015 of 8163. Despite a healthy trend higher, in the days to come AUDUSD may find it difficult to cross beyond the implied high and key technical level.

Turning our attention to the down-side, there is a trend-line rising up from late-May which continues to keep aussie pointed higher. Maintain that line, despite resistance, then it at least remains stable. A break, though, would likely bring into play lower levels, and with that the projected one-week low at 7939. A rejection from resistance and break of a rising trend-line could lead to extended selling, and thus a move below the projected low.

For other currency volatility-related articles please visit the Binaries page.

AUDUSD: Daily

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—Written by Paul Robinson, Market Analyst

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