AUD/USD Technical Analysis: Down Trend Still Holds Sway
AUD/USD Technical Strategy: NET SHORT AT 0.7547
- Australian Dollar bounce looks corrective within broader down trend
- Looking for counter-trend break to weigh up adding to short position
- Daily close above 0.77 needed to conclusively invalidate bearish bias
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The Australian Dollar has recovered nearly 3 percent of its value since hitting an 11-month low in early May but the dominant price trend points firmly lower. A well-defined series of lower highs and lows from late January has taken prices through two-year support, painting current gains as corrective.
Zooming in to the four-hour chart, prices are probing falling trend resistance, with a decisive break one way or another probably within view. A break below counter-trend support would mark resumption. Back on the daily chart, a close above the 0.77 figure would be convincing invalidation of the bearish bias.
The AUD/USD short trade initiated at 0.7608 and subsequently scaled up remains in play, with the cost basis now at 0.7547. Adding to the position further will be evaluated as price action offers attractive risk/reward opportunities to do so. A stop-loss will be triggered on a discretionary basis.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.