AUD/USD Technical Analysis: Aiming Lower After Support Break
AUD/USD TECHNICAL OUTLOOK: BEARISH
- Australian Dollar breaks counter-trend support, sellers retake initiative
- Monthly chart hints near-term weakness may mark start of bigger drop
- Invalidating immediate bearish bias requires clear break above 0.6930
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The Australian Dollar looks to be resuming the dominant downtrend against its US counterpart. A daily close below rising trendline support establishing the bounds of a corrective upswing from October lows suggests that move has now ended.
From here, a daily close below minor resistance-turned-support at 0.6811 looks likely to set the stage for another challenge of the 0.6671-90 support shelf. That barrier has cut off progress to the downside since early August. Reestablishing above 0.6930 looks like a prerequisite to neutralize near-term selling pressure.
Zooming out to the monthly chart for a broader perspective, signs of bearish resumption in more immediate positioning have appeared just as prices retest pivotal support-turned-resistance in the 0.6900-0.7018 zone. If they portend rejection, a longer-term down move to the 0.6000-0.6352 zone may well be underway.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.