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