AUD/USD Technical Analysis: Down Trend May Have Resumed
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- AUD/USD Technical Strategy: Flat
- Aussie Dollar down trend may be resuming after trend line break
- Current trading range too narrow to justify entering short position
The Australian Dollar appears to haveresumed the down trend against its US counterpart after breaking counter trend line support set from late May. The sentiment-linked currency plunged amidrisk aversion triggered in the aftermath of the UK “Brexit” referendum.
From here, a daily close below the 50% Fibonacci expansion at 0.7302 paves the way for a challenge of the 61.8% level at 0.7221. Alternatively, a reversal back above the 38.2% Fib at 0.7384 opens the door for a retest of 0.7498, the intersection of trend line support-turned-resistance and a horizontal pivot level.
While entering short seems thematically enticing, the available trading range is too narrow to justify taking a position from a risk/reward perspective. With that in mind, opting for the sidelines seems prudent for now until a more attractive opportunity presents itself.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.