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Talking Points:
- AUD/USD Technical Strategy: Flat
- Aussie Dollar edges lower to challenge three-month trend line support
- Waiting for clear-cut breakout confirmation before opening short trade
The Australian Dollar is attempting to build downside momentum against its US counterpart after signaling a top with the appearance of a bearish Evening Star candlestick pattern. Prices now challenge rising trend line support capping the downside since late May.
From here, a daily close below trend line support – now at 0.75787 – opens the door for a test of the July 27 low at 0.7421. Alternatively, a reversal above the August 11 high at 0.7756 paves the way for a challenge of the August 11 top at 0.7760.
Fundamental considerations appear to favor a bearish AUD/USD bias. Still, confirmation of reversal requires a clear-cut break of trend line support to be actionable. With that in mind, it seems prudent to wait before initiating a short position until a better-defined opportunity presents itself.
What do past AUD/USD trading patterns hint about current price action? Find out here!
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