AUDUSD Chart Analysis: Upswing Expected to Keep Downtrend Intact
AUDUSD CHART ANALYSIS: BEARISH
- AUD breaks near-term resistance, hinting at upswing ahead
- Overall chart positioning still argues for a bearish trend bias
- Triangle pattern implies downside objective near 0.67 figure
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The Australian Dollar rose after putting in a bullish Morning Star candlestick pattern, breaking above trend line resistance guiding the move lower since mid-April. That seems to suggest an upswing is ahead, though overall positioning continues to imply a broader bearish bias.
Prices face initial resistance in the 0.6978-0.7021 area, which marks the former bottom of a bearish Descending Triangle pattern. Overcoming this barrier on a daily closing basis is needed to suggest any near-term rise is more than corrective. Clearing the subsequent falling trend resistance set from early December 2018 – now in the 0.7039-0.7112 zone – would warn of meaningful trend change.
Zooming out to the weekly chart, resumption of the 2018 downtrend following a consolidative period through most of the first half of this year appears to be the path of least resistance. A conservative accounting of the measured-move objective for the on-coming decline implied by the completed Descending Triangle formation puts the 0.67 figure in the spotlight.
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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.