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AUD/USD Technical Analysis: Down Trend May Now Be Underway

AUD/USD Technical Analysis: Down Trend May Now Be Underway

2017-09-19 04:10:00
Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • AUD/USD Technical Strategy: Flat
  • Aussie Dollar signals a double top has been established below 0.82 figure
  • Convincing break of secondary trend support sought for short trade setup

The Australian Dollar turned lower against its US namesake as expected, with a break of three-month trend support hinting a double top has been established. The turn lower followed the appearance of a bearish Evening Star candlestick pattern coupled with pronounced negative RSI divergence.

From here, a daily close below 0.7937 – marked by a secondary rising trend line and the 23.6% Fibonacci retracement – exposes the 0.7808-21 area (August 15 low, 38.2% level). Alternatively, a move back above the 14.6% Fib at 0.8009 opens the door for a retest of the July 27 high at 0.8066.

It seems prudent to wait for a definitive break of nearer-term trend support established from mid-August before committing to a short position, particularly as potent event risk in the form of the FOMC monetary policy announcement looms ahead. In the meantime, opting for sidelines seems most attractive.

Are you making the #1 most common mistake when trading AUD/USD? Find out here!

AUD/USD Technical Analysis: Down Trend May Now Be Underway

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