AUD/USD Technical Analysis: Deeper Aussie Dollar Drop Expected
AUD/USD Technical Strategy: NET SHORT AT 0.7456
- Australian Dollar stalls but trend bias favors bearish resumption
- Break of support above 0.70 threatens decline to three-year lows
- Short trade remains in play, invalidation point above 0.71 mark
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The Australian Dollar is stalling at support above the 0.70 figure against its US namesake but the broader price trend continues to look decidedly bearish. Rejection on a re-test support-turned-resistance in the 0.7085- 0.7104 area may precede bearish resumption.
Immediate support is at 0.7041, the October 8 low. A break below that confirmed on a daily closing basis sees the next significant barrier at 0.6900, the September 2015 low, followed by the January 2016 bottom at 0.6827. Alternatively, a break above 0.7104 exposes trend resistance in the 0.7156-0.7229 zone.
A short AUD/USD position was activated at 0.7608. It was subsequently scaled up, first near 0.7530, then at 0.7325, and most recently at 0.7205. That makes for an overall cost basis at 0.7456. The stop-loss will be triggered on a dictionary 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.