AUDUSD TECHNICAL OUTLOOK: BEARISH
- AUDUSD break of six-week uptrend hints downtrend has resumed
- Support now at June 2016 floor, break may expose 2019 spike low
- Long-term setup suggests AUDUSD heading to lowest in a decade
Get help building confidence in your AUDUSD strategy with our free trading guide!
The Australian Dollar broke rising trend support guiding the advance against its US counterpart since mid-June after recoiling from resistance capping gains since early December 2018. The breach paints the upswing as corrective and suggests that the dominant down move has been re-engaged.
Prices have gone on to overcome the July 10 low at 0.6911, setting the stage to challenge a defining support block running down through the January 2016 bottom at 0.6827. A daily close below that probably puts the 2019 spike low at 0.6744 in the crosshairs.
The first substantive layer of resistance is clustered around the 0.70 figure. However, buyers would likely have to manage a breach above falling trend resistance – now at 0.7069 – to convincingly neutralize the bearish bias and make a convincing case for upside follow-through.
Chart created with TradingView
Zooming out to the weekly chart for a bit of perspective, the longer-term setup still suggests that the completion of a bearish Descending Triangle chart pattern has set the stage for a resumption of the down move launched in early 2018. That setup implies a decline to a decade low just above the 0.67 mark.
Chart created with TradingView
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 live webinar and have your trading questions answered
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To contact Ilya, use the comments section below or @IlyaSpivak on Twitter
