AUD/USD Technical Analysis: Aussie Selloff Expected to Resume
AUD/USD TECHNICAL OUTLOOK: BEARISH
- Aussie Dollar selloff stalls just below 0.67 figure vs US counterpart
- Daily close above 0.6930 may neutralize near-term selling pressure
- Overall trend bias continues to broadly favor a downside scenario
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The Australian Dollar has stalled near the 0.68 figure after recoiling from resistance guiding the downtrend against its US counterpart since early December 2018. Initial support is at 0.6770, the November 14 swing low, with a daily close below that exposing the range floor in the 0.6671-90 area.
Immediate resistance begins in the 0.6881-95 congestion area, but 0.6930 seems like the truly decisive point in the near term. That is the confluence of 11-month trend resistance, the underside of a broken counter-trend line, and October’s swing top. A daily close above that would hint at trend change in the works.
The monthly chart continues to look ominous however, suggesting the overall bias will probably still favor the downside even if the bounds of the 2019 descent are broken. It shows breaking of a 17-year uptrend being followed by a push through a four-year support shelf, hinting a structural decline is underway.
A period of digestion might have been expected after prices sank to a decade low just two months ago. October’s conspicuous hold on a retest of resistance in the 0.6900-0.7018 zone suggests the path least resistance leads lower to test below the 0.64 figure in the weeks ahead however.
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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.