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AUD/USD Technical Analysis: 10-Month Trend Resistance Broken

AUD/USD Technical Analysis: 10-Month Trend Resistance Broken

2018-11-02 02:00:00
Ilya Spivak, Head Strategist, APAC
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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

Get help building confidence in your AUD/USD strategy with our free trading guide!

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.

Australian Dollar vs US Dollar chart - daily

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 Technical Analysis: 10-Month Trend Resistance Broken

AUD/USD TRADING RESOURCES

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

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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