To receive Ilya's analysis directly via email, please SIGN UP HERE
- AUD/USD Technical Strategy: Short at 0.7423
- Aussie Dollar puts in bearish candle setup at key resistance
- Downturn would see initial support below 0.74 mark vs. USD
The Australian Dollarmay be preparing to turn lower anew after recovering to test the bounds of a two-month down trend against its US counterpart. Prices corrected higher as expected but a bearish Evening Star candlestick pattern now suggests the dominant bearish bias is reasserting itself.
From here, a daily close below the 23.6% Fibonacci expansion at 0.7368 opens the door for a test of the May 9 low at 0.7329, followed by the 38.2% level at 0.7306. Alternatively, a break above 0.7456 (channel top, neckline support-turned-resistance) exposes the 38.2% Fib retracement at 0.7490.
Risk/reward parameters appeared acceptable and a short AUD/USD position has been triggered at 0.7423. The trade initially targets 0.7368 and carries a stop-loss set to activate on a daily close above 0.7456. Profit on half of the position will be taken and the stop-loss moved to breakeven once the first objective is met.
What will drive AUD/USD next week? Join the outlook webinar and find out!