Australian Dollar: AUD/USD Technical Outlook May Soon Turn Bearish
Australian Dollar Highlights:
- AUD/USD rally at a cross-road of trend resistance
- Short-term up-trend may soon give-way to broader downtrend
The Australian Dollar tagged strong support just below the 6700 line to start last month, and since then has rebounded with a series of higher-highs and higher-lows to keep it pointed higher. The near-term trend could be set up to soon end with resistance in the area.
The trend-line from December, crossing over peaks in April and July, is very near the 200-day MA, which interestingly enough also runs over several highs in the past year. The turn AUD/USD could happen soon as the two forms of trend resistance are effectively in confluence.
A turn down with strong momentum will be indication that a move in-line with the prevailing bear-trend could be underway. Seeing a break of the lower parallel break making up the channel off the Oct low will be considered confirmation that the sub-6700 support tested four times from Aug-Oct will likely be under siege again.
Overnight headline: RBA Let Rate on Hold, As Expected
A fifth attempt at support is seen as having a fairly high likelihood of breaking it, but even as such the 6700/6670 zone should be respected as support until broken. If a surge of buying shows up as it has before, traders who are positioned short should be prepared for a bounce at the least. A slice on through could extend bearish trades towards the 2008-09 lows situated in the area of 6300/000.
In the event there is no turn down soon, and price surges through the aforementioned resistance levels, then a bearish bias will need to be shelved, perhaps in favor of a bullish trading bias as the trend could be reversing course.
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AUD/USD Daily Chart (at trend-line/200-day cross-road)
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.