AUD/USD Technical Strategy: NET SHORT AT 0.7547
- Australian Dollar down trend remains firmly in place after rebound
- Counter-trend break, retest hint bearish resumption may be imminent
- Opting to wait before adding to short position as US jobs data looms
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The Australian Dollar has managed a tepid recovery after hitting an 11-month low against its US counterpart but the dominant down trend remains firmly in place. Price action has been defined by a series of lower highs and lows since late January, with a break of trend support from early 2016 reinforcing a bearish bias.
Turning to the four-hour chart, a break of counter-trend support guiding the recovery form early-May and the appearance of negative RSI divergence on its subsequent retest hint bearish resumption may be imminent. Initial support is at 0.7486, with a break below that exposing barriers at 0.7446 and 0.7410.
Short AUD/USD exposure established at 0.7608 and later scaled up near 0.7530 remains in play, with an overall cost basis at 0.7547. Adding to the trade seems compelling technically but caution seems prudent ahead of incoming US jobs data. With that in mind, opting for the status quo will do for now.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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