AUD/USD Technical Analysis: Upside Correction Hinted Ahead
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- AUD/USD Technical Strategy: Flat
- Bullish Engulfing Candlestick Pattern Hints Australian Dollar May Bounce vs. US Counterpart
- Waiting for New Opportunity to Trigger Short Trade, RBA Rate Decision is Critical Event Risk
The Australian Dollar put in a Bullish Engulfing candlestick pattern, hinting a bounce against its US counterpart may be brewing ahead. Follow-through probability is clouded in uncertainty however as the RBA monetary policy announcement looms ahead, with the outcome threatening to meaningfully alter technical positioning.
A daily close above support-turned-resistance at 0.7199 opens the way for a move higher to challenge the 0.7381-87 area marked by the October 12 and the 38.2% Fibonacci retracement. Alternatively, a push through rising trend line support set from early September – now at 0.7077 – sees the next downside threshold at 0.6902, the 38.2% Fib expansion.
On balance, the dominant trend continues to favor a bearish bias. With that in mind, any on-coming gains are likely to be corrective in the context of a larger decline. We will wait on the sidelines for now, looking for the bounce to play out or be invalidated with a break of trend line support to position for selling opportunities.
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