AUDUSD Chart Analysis: Downtrend Expected to Resume After Bounce
AUDUSD CHART ANALYSIS: BEARISH
- Australian Dollar bounce seen as corrective within broader downtrend
- Invalidating bearish bias needs a breach of resistance above 0.71 figure
- Weekly chart positioning implies downside objective near the 0.67 mark
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The Australian Dollar has managed a tepid recovery against its US counterpart after finding support just above the January 2016 low at 0.6827. Still, the outlines of the breakdown identified last week – a breach of countertrend support following rejection former resistance in the 0.6978-0.7021 area – remain intact.
That paints the current rise as corrective within the context of a larger descent. In fact, buyers would probably need to engineer a daily AUDUSD close above falling trend line resistance set from early December 2018 – now at 0.7114 – to convincingly neutralize the downside bias.
Bearish resumption that brings the exchange rate below 0.6827 targets the 2019 spike low at 0.6744 next. The weekly chart warns of deeper losses still, showing a completed Descending Triangle chart formation that implies a measured downside target within a hair of 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.