Aussie Rebound at Resistance, RBA Eyed


AUDUSD CHART ANALYSIS: BEARISH

  • AUD rebound stalls at key resistance as RBA rate decision looms
  • Overall chart setup suggests recent gains corrective, trend bearish
  • Invalidating downtrend probably needs a daily close above 0.71

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The Australian Dollar traded higher as expected after producing a bullish Morning Star candlestick pattern and breaking near-term trend resistance set from mid-April. Prices are now testing support-turned-resistance marked by the floor of a recently completed Descending Triangle pattern in the 0.6978-7021 area.

As it stands, the rally appears to be corrective in the context of a larger decline started in early January 2018 and resumed with the mid-May Triangle breakout. Invalidating that bearish bias probably calls for a daily close above falling trend line resistance (and Triangle top) set from December, now at the 0.71 figure.

AUDUSD chart - daily

Having said that, an actionable short trade signal appears to be absent for now. If a reversal does materialize, sellers face initial support in the 0.6827-65 area (January 2016 low, May swing bottom). Beyond that is the 2019 spike low at 0.6744.

AUDUSD 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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