AUD/USD Technical Analysis: Sellers Struggle for Follow-Through
AUD/USD Technical Strategy: FLAT
- Australian Dollar counter-trend line break hints at bearish trend resumption
- Sellers struggling to find lasting follow-though past support under 0.72 figure
- Waiting for improved risk/reward setup to consider entering short position
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Australian Dollar sellers are struggling to find follow-through after pushing the currency below support guiding the upswing from late October against its US counterpart. The pair is hovering at familiar resistance-turned-support in the 0.7142-70 area. A break below it on a daily closing basis exposes the 0.7021-41 zone.
Minor resistance is marked by the December 13 high at 0.7248. A push beyond that exposes a more substantive upside hurdle in an area bracketed by former counter-trend support and the December 3 swing top. The latter level marks the region’s outer layer at 0.7393.
An actionable trade setup seems absent at the moment. Overall positioning seems to suggest bearish trend resumption is in progress, but prices are too close to immediate support to justify entering short on risk/reward grounds. With that in mind, opting to stand aside seems prudent.
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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.