AUD/USD Technical Analysis: Six-Week Uptrend Broken
To receive Ilya's analysis directly via email, please SIGN UP HERE
- AUD/USD Technical Strategy: Pending Short at 0.7710
- Aussie down trend may be resuming after break of 6-week support line
- Upswing sought to enter short with improved risk/reward parameters
The Australian Dollarappears to be topping as expected, with prices putting in a bearish Evening Star candlestick pattern and breaking support guiding prices higher since mid-January. Positioning suggests the long-term down trend may be resuming after a protracted recovery form December 2016 lows.
Near-term support is in the 0.7595-0.7609 area (23.6% Fibonacci expansion, January 24 high), with a break below that on a daily closing basis exposing the 0.7498-0.7505 region (November 29 high, 38.2% level). Alternatively, a turn above trend line support-turned-resistance at 0.7689 sees the next major upside barrier at 0.7760, a double top capping gains since August 2016.
Risk/reward parameters are skewed against taking a short position at current levels. With that in mind, an entry order has been established to sell the pair at 0.7710. If triggered, the trade will initially target 0.7609 and carry a stop-loss activated on a daily close above 0.7760.
Join the AUD/USD outlook webinar LIVE to see what drives prices each week!
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.