AUD/USD Technical Strategy: BEARISH
- Aussie Dollar still stuck in a choppy range centered on 0.71 figure
- Descending Triangle setup may set the stage for bearish resumption
- Daily close below 0.6982 needed as confirmation of a breakdown
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The Australian Dollar is struggling to find lasting direction against its US counterpart, with prices oscillating in a choppy range broadly centered around the 0.71 figure. This is despite bursts of volatility, triggered most recently by the RBA rate decision as well as better-than-expected retail sales and trade data.
Overall positioning continues to hint at a downside bias however. Prices appear to be carving out a descending Triangle pattern, a setup that typically carries bearish implications. Its validation on a daily close below support in the 0.6982-0.7021 area may set the stage to resume the downtrend form January 2018 highs.
The first major downside threshold thereafter comes in at the 0.69 figure, followed by the January 2016 low at 0.6827. Hefty resistance runs through is marked by a falling channel top and the Triangle pattern top. A daily close above its outer layer 0.7196 targets the January 31 high at 0.7295.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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