AUD/USD Technical Analysis: Eyeing May Low as Down Trend Resumes
AUD/USD Technical Strategy: NET SHORT AT 0.7547
- Aussie Dollar resuming down trend after counter-trend support break
- Push through May swing low opens the door to test below 0.74 mark
- Improved risk/reward setup sought to add to AUD/USD short position
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The Australian Dollar is vulnerable to deeper losses against its US counterpart after breaking counter-trend support guiding the upswing early May. That rise now looks confirmed as a correction within the context of a longer-term decline launched in late January.
From here, sellers are poised to challenge the May 9 low at 0.7413, with a break below that on a daily closing basis opening the door for a test of inflection point support stretching back to mid-June 2016 at 0.7335. Immediate resistance is in the 0.7585-0.7606 area.
The short AUD/USD position triggered at 0.7608 and subsequently scaled up near 0.7530 is still in play. Adding to exposure is tempting but the velocity of the latest down move has skewed risk/reward parameters against doing so. A bounce to establish a new swing high against which to set a stop-loss will be sought.
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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.