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AUD/USD Technical Strategy: NET SHORT AT 0.7492

  • Australian Dollar rebound neutralizes 3-week resistance hurdle
  • Dominant chart setup continues to favor downtrend resumption
  • Short AUD/USD trade still in play, invalidation above 0.73 mark

See our free guide to get help building confidence in your AUD/USD trading strategy!

The Australian Dollar has mounted a spirited recovery against its US counterpart but overall chart positioning continues to favor downtrend resumption. The four-hour chart reveals a break of three-week resistance, seemingly defusing immediate selling pressure.

AUD/USD Technical Analysis: Trend Bias Still Bearish After Rebound

Turning to the daily chart however, the move has amounted to no more than retest of recently broken double bottom support in the 0.7145-75 area, now recast as resistance. Furthermore, anything shy of a daily close above the outer layer of trend resistance – now at 0.7330 – keeps the dominant bias convincingly bearish.

Australian vs US Dollar chart - daily

With that in mind, the short AUD/USD position initiated at 0.7608, then scaled up near 0.7530 and thereafter again at 0.7325, remains in play.The overall cost basis is 0.7492. A stop-loss will be activated on a discretionary basis, although a break of trend resistance is a likely catalyst to exit.

AUD/USD TRADING RESOURCES

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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