AUDUSD Chart Analysis: Aussie Dollar Resumes Downtrend, Eyes 0.67
AUDUSD CHART ANALYSIS: BEARISH
- AUD bounce rejected at former support, countertrend line broken
- Downtrend resumption initial eyes support in the 0.6827-65 area
- Longer-term positioning hints at test of 0.67 figure on the horizon
The Australian Dollar appears to have confirmed that the recent upswing against its US counterpart was corrective in the context of a larger downtrend, as expected. Prices dropped after putting in a demonstrative Bearish Engulfing candlestick pattern on a retest of support-turned-resistance and broke rising countertrend support set from mid-May, seemingly confirming the reversal.
Near-term support is now in the 0.6827-65 zone, marked by the latest swing bottom as well as the January 2016 low. Breaking below that on daily closing basis seems likely to open the door for a test of the 2019 spike low at 0.6744. Immediate resistance remains in the 0.6978-0.7021 zone, with a reversal back above setting the stage for a challenge of the downward trend in place since early December 2018.
Zooming out to the weekly chart hints that a still-deeper downturn might be in the cards. That the latest swing lower was triggered squarely at the underside of a completed Descending Triangle chart pattern appears to reinforce the setup’s validity, and thereby its broader implications. A measured-move objective derived from a conservative assessment of its widest point implies downward progression to test the 0.67 figure.
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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.