AUD/USD Technical Strategy: NET SHORT AT 0.7420
- Australian Dollar rejected after testing downtrend resistance
- October swing low under fire, breakdown to expose 0.69 mark
- Waiting for improved risk/reward to add to AUD/USD short
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The Australian Dollar looks to be resuming the downtrend against its US counterpart, as expected. Prices recoiled from trend line resistance capping gains since late January, slipping back below the 0.71 figure to challenge October’s swing bottom at 0.7041 once again.
A daily close below this boundary broadly exposes the September 2015 low at 0.6900, a barrier closely followed by the January 2016 bottom at 0.6827. The upper layer of trend resistance is now at 0.7190, with a daily close above that targeting the 0.7304-15 zone.
The short AUD/USD position activated at 0.7608 and then scaled up – first near 0.7530, then at 0.7325, again at 0.7205 and most recently at 0.7124 – remains active. Proximity to support makes adding to exposure furtherunattractive currently, but price action will be closely monitored for incoming opportunities to do so.
AUD/USD TRADING RESOURCES
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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