AUD/USD TECHNICAL OUTLOOK: BEARISH
- Aussie Dollar erases tepid breakdown, snaps back into familiar range
- Overall AUD chart setup still argues for a broadly bearish trend bias
- Long-term positioning hints a move to test below 0.64 is in the cards
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Last week, the Australian Dollar cautiously edged past range support, seemingly setting the stage for a move below the 0.67 figure. A warning about false breakout risk proved prescient however as prices recoiled from one-month lows to undo the breach and return to a familiar congestion region.
Buyers have their work cut out for them if they hope to mount a lasting rally however. Back-to-back resistance levels run from 0.6827 up to the bounds of the 2019 downtrend, now at 0.7020. A daily close above that is probably needed to neutralize the near-term bearish bias.
AUD/USD chart created with TradingView
Longer-term positioning seems to bolster sellers’ argument. The monthly chart reveals prices finished August with the weakest close in over a decade. This follows a breach of 20-year rising trend floor and a push through a four-year support shelf. The next major downside hurdle begins at 0.6352 and runs to the 0.60 figure.
AUD/USD chart created with TradingView
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To contact Ilya, use the comments section below or @IlyaSpivak on Twitter
