AUDUSD Technical Strategy: BEARISH
- AUD bounce on Morrison election win rejected at near-term resistance
- Break of January 2016 bottom exposes 2019 spike low below 0.68 mark
- Longer-term positioning implies a descent to 0.67 in the coming weeks
Get help building confidence in your AUDUSD strategy with our free trading guide!
The Australian Dollar has seemingly failed to make much of a politically-driven upward jump against its US counterpart at the start of the week. The currency touched the top of its month-long downtrend after Prime Minister Morrison unexpectedly triumphed in the federal election but swiftly recoiled lower, helped along by dovish commentary from the RBA.
Prices are eyeing near-term support at 0.6827, the January 2016 bottom. Breaking below that opens the door for a challenge of the 2019 spike low at 0.6744. Trend line resistance is now at 0.6930. A breach above that confirmed on a closing basis neutralizes immediate selling pressure and sets the stage for a retest of support-turned-resistance in the 0.6978-0.7021 area.
Zooming back to a weekly chart, overall positioning continues to point to resumption of the 2018 downtrend following a period of consolidation. That sideways drift traced out a Descending Triangle chart pattern, which now implies a measured downside objective near the 0.67 figure. The upcoming release of minutes from this month's FOMC meeting may help drive the setup’s realization.
AUDUSD TRADING RESOURCES
- Just getting started? See our beginners’ guide for FX traders
- Having trouble with your strategy? Here’s the #1 mistake that traders make
- Join a free Trading Q&A webinar and have your questions answered
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To contact Ilya, use the comments section below or @IlyaSpivak on Twitter