AUD/USD Technical Strategy: BEARISH
- Australian Dollar bounce stalls at near-term trend resistance
- Triangle floor in focus, with breakdown to target below 0.67
- Convincing bullish invalidation starts with Triangle top break
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The Australian Dollar has continued to build on a reversal from resistance above the 0.72 figure, breaking support guiding the shorter-term upswing from early March. Prices are now testing the 0.6982-0.7021 area, a downside barrier limiting downside progress since October.
This zone also marks the lower boundary of a large Descending Triangle pattern. Confirmation on a daily close below it would complete the setup, suggesting that the dominant downtrend from January 2018 highs has resumed and implying a measured downside objective near 0.6650.
Sizing up near-term positioning on the four-hour chart, an upswing from support just below the 0.70 mark appears to be struggling to sustain momentum as prices test support-turned-resistance in the 0.7049-73 congestion region. This is reinforced by falling trend line resistance set from the April 17 swing high.
On balance, recent gains appear to be corrective within the context of a down move, at least thus far. Invalidating the bearish bias probably begins with a push through 0.7073 but a close above the Triangle top (now at 0.7158) is probably needed to establish conviction.
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
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