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AUD/USD Technical Analysis: Holding Short After Upside Push

AUD/USD Technical Analysis: Holding Short After Upside Push

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Talking Points:

  • AUD/USD Technical Strategy: Short at 0.7058
  • Aussie Dollar Soars After Upbeat Jobs Data, Attempts to Overturn Monthly Down Trend
  • Opting to Hold Short Position Absent Bullish Reversal Confirmation on Trend Line Break

The Australian Dollar rose against its US counterpart having been mired in a quiet consolidation range above the 0.70 figure following a strong set of jobs figures. The pair has thus far failed to build bearish follow-through after breaking rising trend line support set from earlySeptember, a move that seemingly hinted at long-term down trend resumption.

From here, a daily close above the 0.7164-99 area marked by a falling trend line and a horizontal pivot level opens the door for a challenge of the 38.2% Fibonacci retracement at 0.7392. Alternatively, a turn below initial support at 0.7016, the November 10 low, clears the way for a test of the 38.2% Fib expansion at 0.6902.

We entered short AUDUSD at 0.7058, initially targeting the September 4 low at 0.6907. Confirmation of a bullish reversal remains absent for now absent a break of trend line resistance. With that in mind, we will continue to hold the position and wait for sellers to re-take the initiative.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.