AUD/USD Technical Strategy: FLAT
- Australian Dollar soars through ten-month trend resistance
- Short AUD/USD trade closed as prices aim above 0.73 mark
- Long-term trend bias still bearish following corrective rise
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The Australian Dollar surged upward against its US counterpart, putting in the largest one-day rally in almost two years and breaking resistance guiding it steadily lower since early January. The breakout suggests the near-term bearish bias has been invalidated, opening the door for upside follow-though.
A daily close above resistance in the 0.7304-15 area exposes a minor barrier at 0.7382, and then the 0.7452-61 region. Initial support is at 0.7160, a former range top marked by the October 17 high. Reversing back below that paves the way for a challenge of the base from which the latest rally has been launched at 0.7041.
Profit has been booked on the short AUD/USD trade triggered at 0.7608 and subsequently scaled up – first near 0.7530, then at 0.7325, again at 0.7205 and most recently at 0.7124. The monthly chart still points to a firmly bearish bias after a break of 16-year support however, painting any upswing from here as corrective. With that in mind, opportunities to re-enter short will be sought in the days and weeks ahead.
AUD/USD TRADING RESOURCES
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- Having trouble with your strategy? Here’s the #1 mistake that traders make
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To contact Ilya, use the comments section below or @IlyaSpivak on Twitter
