AUD/USD Technical Analysis: Eyeing 0.73 After Swing High Break
AUD/USD Technical Strategy: NEUTRAL
- Aussie Dollar breaks past former swing high, sets sighs above 0.73
- Long-term positioning suggests overall trend bias remains bearish
- Absence of an actionable trade signal argues for a patient posture
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The Australian Dollar pushed past resistance marked by the January 11 swing high at 0.7235 in the wake of an FOMC policy announcement judged as dovish by financial markets. A choppy congestion area now looms ahead, with the next clearly identifiable resistance point marked by the December 3 high at 0.7393.
A beak above this barrier on a daily closing basis opens the door for a retest of former support in the 0.7452-61 area. Alternatively, a turn downward that takes price back below 0.7235 seems likely put the 0.7142-70 zone back into focus as the next downside barrier.
Turning to longer-term positioning, the monthly chart still seems to argue for a broadly bearish bias. The pair broke 17-year rising trend support in October and subsequent price action speaks to digestion rather than imminent recovery.
With that in mind, chasing the near-term rally upward seems uncomfortably counter-trend. On the other hand, the absence of a clear-cut bearish reversal signal means fading recent gains appears premature. That calls for patience, with a perch on the sidelines probably most appealing until an opportunity presents itself.
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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.