AUD/USD Technical Analysis: Choppy Aussie Range Belies Aim Lower
AUD/USD Technical Strategy: NET SHORT AT 0.7547
- Aussie Dollar still locked in choppy range near 0.74 vs US namesake
- Six-month down trend resistance held, making for broadly bearish bias
- Short position remains active pending confirmation to scale up or exit
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The Australian Dollar remains locked in a choppy range near 0.74 against its US counterpart but the prevailing trend continues to favor the downside. Indeed, overall chart positioning is still defined by a series of lower highs and lows carved out since late January.
Near-term support is at 0.7335, a chart inflection point in play since mid-June 2016. A daily close below it paves the way for a retest of double bottom in the 0.7145-65 area. Alternatively, an upward push beyond the outer layer of trend resistance – now at 0.7505 – sees the next major upside hurdle above the 0.76 figure.
The short AUD/USD trade activated at 0.7608 and then scaled up near 0.7530 remains active. Choppy range-bound trade does not offer the needed confirmation to add to the trade or unwind it. The former needs evidence of bearish resumption while the latter calls for a clear-cut break of trend resistance.
With that in mind, opting for a wait-and-see approach seems most prudent for now as the deadlock is resolved and prices offer convincing near-term direction cues. A stop-loss on the cumulative position will be activated 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.