AUD/USD Technical Strategy: BEARISH
- Aussie Dollar bounces after outsized drop vs USD, as expected
- Sellers may wait for confirmation of exhaustion before trading
- Near-term resistance capped at 0.7170 and support at 0.7054
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The Australian Dollar rebounded against its US counterpart from lows set in the wake of a dovish shift in RBA rhetoric, making good on signs of ebbing downside momentum identified last week. Prices now face resistance in the 0.7142-70 area, with a daily close above that initially exposing 0.7235.
Near-term support is in the 0.7054-76 region. A reversal that takes prices back through this barrier sets the stage for a test of 0.6982, the January 2 bottom. Taking out this barrier would finally take prices out of the choppy range containing them since early October, marking longer-term downtrend resumption.
Sellers looking to establish or add to short exposure may view the latest bounce as an opportunity once signs of topping begin to emerge, hinting that the correction has run its course. That is yet to appear even in nearer-term positioning on the four-hour chart however, arguing for patience until confirmation can be had.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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