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AUD/USD Technical Analysis: September Floor Back Under Fire

AUD/USD Technical Analysis: September Floor Back Under Fire

Ilya Spivak, Head Strategist, APAC

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.

Australian Dollar vs US Dollar price chart

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.

AUD/USD 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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