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AUDUSD Technical Analysis: Aussie Dollar Top May Be in Place

AUDUSD Technical Analysis: Aussie Dollar Top May Be in Place

Ilya Spivak, Head Strategist, APAC

AUDUSD TECHNICAL OUTLOOK: BEARISH

  • AUDUSD recoils from trend resistance, signals a top is in place
  • Near-term support at 0.6827, with 2019 low at 0.6744 following
  • Overall chart setup still hints at descent to challenge 0.67 figure

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The Australian Dollar tracked lower after a retest of support-turned-resistance at the bottom of a bearish Descending Triangle chart pattern, as expected. Prices attempted to recover after breaking counter-trend support and even managed to set a higher swing top, but the effort fizzled. A bearish Evening Star coupled with negative RSI divergence now reinforces the case for a reversal.

Australian Dollar vs US Dollar price chart - daily

From here, the next significant layer of support seems to be in the 0.6827-65 area, marked by recent attempts to challenge trend-defining support at the January 2016 low. Securing a break below that on a daily closing basis probably opens the door for a challenge of the 2019 spike low at 0.6744. The outermost layer of downward-sloping trend resistance is now at 0.7088.

Zooming out to the weekly chart, overall technical positioning continues to suggest the AUDUSD downtrend started in early 2018 has resumed following a period of congestion. While the support at 0.6827 is yet to be broken, measuring the width of the Descending Triangle pattern defining the digestive period prior to breakdown implies a steeper decline to test the 0.67 figure.

AUDUSD Technical Analysis: Aussie Dollar Top May Be in Place

AUDUSD TRADING RESOURCES

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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