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AUD/USD Technical Analysis: Double Top in the Works Near 0.81?

AUD/USD Technical Analysis: Double Top in the Works Near 0.81?

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Talking Points:

  • AUD/USD Technical Strategy: Flat
  • Aussie Dollar may be forming double top near 0.81 vs US counterpart
  • Breakdown confirmation sought before establishing a short position

The Australian Dollar put in a bearish Evening Star candlestick pattern on a test of resistance near 0.81 against its US counterpart, hinting a turn lower may be brewing ahead. Negative RSI divergence points to ebbing upside momentum, bolstering the case for a downside scenario.

Near-term support is at 0.7963 (range top resistance-turned-support, trend line), with a daily close below that opening the door for a test of a support shelf at 0.7881. Alternatively, a push through the 0.8066-87 area (July 27 high, 38.2% Fibonacci expansion) sees the next upside barrier at 0.8173, the 50% level.

The series of higher highs and lows set from the May/June swing bottom remains intact, warning that – strictly speaking – the near-term trend bias still favors the upside. With that in mind, waiting for further confirmation seems prudent before committing to taking on a short position.

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