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AUD/USD Technical Analysis: Attempting Upside Breakout

AUD/USD Technical Analysis: Attempting Upside Breakout

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Talking Points:

  • AUD/USD Technical Strategy: Flat
  • Aussie Dollar invalidates bearish chart setup, tries to break trend resistance
  • Short position taken above 0.73 closed despite absence of stop-loss trigger

The Australian Dollar is poised to break out higher against its US counterpart having seemingly overturned a bearish reversal signal produced late last week. The pair put in a Dark Cloud Cover candle pattern after the release of December’s US jobs data but Monday’s close seems mark invalidation.

The next layer of significant resistance comes in at 0.7396, the 38.2% Fibonacci retracement, with a daily close above that opening the door for a challenge of the 50% level at 0.7542. Alternatively, a move back below horizontal pivot support at 0.7334 exposes the January 6 low at 0.7284.

A short AUD/USD trade was triggered at 0.7327. The latest move higher has not triggered its stop-loss – set to be activated on a daily close above 0.7357 – but overall positioning has changed materially enough to consider the original setup void. As such, it will be closed for now.

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