AUD/USD Technical Analysis: Upswing Fizzles, Down Trend Holds
AUD/USD Technical Strategy: NET SHORT AT 0.7547
- Australian Dollar pokes above resistance, fails on follow-through
- Recovery above 0.77 figure needed to invalidate bearish trend bias
- Looking for new opportunities to scale up AUD/USD short trade
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The Australian Dollar still looks to be locked in a down trend against its US counterpart after an attempted breakout fizzled out. AUD/USD scored the largest one-day gain in 10 months and even narrowly broke above a falling channel top, but prices quickly backtracked after touching more formidable resistance.
To overcome the bearish bias, buyers would need to clear former support in the 0.7643-60 area and then overturn April’s breach of long-term trend support set from January 2016 lows, now in the 0.7676-0.7709 zone. Anything shy of that looks to be corrective in the context of a broader down move.
As it stands, the short AUD/USD trade started from 0.7608 and subsequently scaled up near 0.7530 remains active, looking for down trend resumption. Opportunities to build the position further will be assessed as they present themselves. The overall cost basis is 0.7547. 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.