AUD/USD TECHNICAL OUTLOOK: BEARISH
- Aussie Dollar slumps after rebound loses steam below 0.69 figure
- September bottom just below 0.67 marking trend-defining support
- Invaliding bearish bias requires clear break of 9-month resistance
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The Australian Dollar turned lower against its US counterpart after a spirited recovery lost momentum ahead of the 0.69 figure. A minor downside hurdle lines up at 0.6744 – the spike low from January – but the real test of sellers’ mettle will probably come on a challenge of the 0.6677-90 support shelf.
A break below this barrier – confirmed on a daily closing basis – would suggest the next substantive leg of the downtrend emanating from late-2018 highs is in progress. The next layer of immediate support is marked by the 38.2% Fibonacci expansion at 0.6621.
On the topside, back-to-back resistance levels begin at 0.6832 and run up to the September 12 high at 0.6895. Meaningful invalidation of the immediate bearish bias probably needs a breach beyond the outer layer of 9-month trend resistance, now at 0.6995.
AUD/USD chart created with TradingView
Tactically speaking, traders contemplating new short-side exposure may be dissuaded on risk/reward grounds considering prices’ proximity to support. Buyers contemplating a bounce may be no more enthusiastic in the absence of a clear-cut reversal signal. A fundamental catalyst may be needed to spark momentum.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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