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AUD/USD Technical Analysis: Coiling Up for a Breakout?

AUD/USD Technical Analysis: Coiling Up for a Breakout?

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • AUD/USD Technical Strategy: Flat
  • Aussie Dollar continues to mark time within a narrowing range
  • Waiting for clear-cut direction cues to establish open exposure

The Australian Dollar may be coiling up for a breakout against its US namesake as prices oscillate in an increasingly narrow range below the 0.78 figure. Sideways consolidation often precedes continuation, implying a bearish bias considering the standstill is occurring within the context of a multi-year down trend.

Trend line support comes in at 0.7575, with a break below that on a daily closing basis broadly exposing a double bottom at 0.7443. Alternatively, a push above downward-sloping resistance at 0.7711 paves the way for a challenge of the August 11 high at 0.7760.

On one hand, prices are too close to near-term resistance to justify a long position from a risk/reward perspective. On the other, the absence of a clearly defined bearish reversal signal warns that it is premature to take up the short side. Remaining on the sidelines seems most prudent for now.

What do past AUD/USD price patterns hint about on-coming trends? Find out here !

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

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