AUD/USD Technical Analysis: Long-Term Decline Resuming?
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- AUD/USD Technical Strategy: Flat
- Australian Dollar Completes Triangle Pattern, Hinting at Down Trend Resumption
- Risk/Reward Considerations Argue for Patience in Entering Short Aussie Position
The Australian Dollar broke downward as expected having traced out a bearish Triangle chart formation against its US counterpart. The Aussie has lost nearly 3 percent since the beginning of the week, making for the worst three-day losing in almost a year.
Near-term support is now at 0.7039, the 100% Fibonacci expansion, with a break below that on a daily closing basis opening the door for a challenge of the 123.6% level at 0.6971. Alternatively, a reversal above support-turned-resistance at 0.7107, the 76.4% Fib, paves the way for a test of the 0.7131-49 area (Triangle floor, 61.8% expansion).
We are keen to enter short AUD/USD in line with the long-term down trend. While the Triangle breakout hints sellers have reclaimed momentum, prices are too close to near-term support to justify triggering a trade from a risk/reward perspective. With that in mind, we will stand aside for now and wait for a better-defined opportunity to present itself.
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