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AUD/USD Technical Analysis: Down Trend Set to Resume?

AUD/USD Technical Analysis: Down Trend Set to Resume?

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Talking Points:

  • AUD/USD Technical Strategy: Short at 0.7327
  • Aussie Dollar forms bearish candle pattern, hinting down trend resuming
  • Short trade triggered, targeting initial support layer comes in below 0.73

The Australian Dollar put in a bearish Dark Cloud Cover candlestick pattern after testing falling trend line resistance, hinting it may be readying to resume its down trend. Last week’s brisk recovery was cut short in the wake of December’s US employment data.

From here, a daily close below the 14.6% Fibonacci expansion at 0.7266 opens the door for a test of the 23.6% level at 0.7211. Resistance is in the 0.7357-96 area (January 5 high, 38.2% Fib retracement). A move back above that sees the next upside barrier at 0.7469, the 50% threshold.

An order to enter short AUD/USD at 0.7327 has now been triggered. The trade initially targets 0.7266, with a stop-loss to be activated on a daily close above 0.7357. Half of the trade will be closed and the stop-loss trailed to breakeven once prices hit the first objective.

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