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AUD Technical Analysis

This is a discussion on AUD Technical Analysis within the Forex Trading forums, part of the Trading Forum category; The Australian Dollar is retesting support-turned-resistance marking the underside of a broken Descending Triangle chart formation in the 0.6978-0.7021 area. ...

          
   
  1. #111
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    Australian Dollar in Bear Market Rally

    The Australian Dollar is retesting support-turned-resistance marking the underside of a broken Descending Triangle chart formation in the 0.6978-0.7021 area. Prices bounced after finding support above the 0.68 figure, marking a bottom with the formation a bullish Morning Star candlestick pattern and a break of trend line resistance set from the mid-April swing high.

    AUD Technical Analysis-audusd-d1-metaquotes-software-corp-2.png


    A push beyond this barrier would cast doubt on the Triangle breakout’s validity as a bearish continuation signal. Neutralizing the near-term downside bias in earnest will probably require a step further to clear downward-sloping resistance capping gains since December 2018, now just above the 0.71 figure. However, zooming into the 4-hour chart hints that upside momentum may already be fading.

    AUDUSD put in a dramatic-looking Shooting Star candlestick on a test of resistance at the 0.7008. This coupled with overt negative RSI divergence suggests the move higher has run out of steam. Confirming that the broader downtrend has commenced calls for a break of upward-sloping support guiding gains from late-May lows, now at 0.6951.

    If a bearish reversal does materialize – cementing recent gains as corrective in the context of an ongoing decline – then there seems to be scope for significant follow-on weakness. Initial support lines up in the 0.6827-64 area, running from the January 2016 low to last month’s swing bottom. Triangle setup calls for deeper losses however, implying a measured move to the 0.67 figure.

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  2. #112
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    AUDUSD Technical Analysis: Bearish Trend To Be Resumed

    The Australian Dollar tracked lower after a retest of support-turned-resistance at the bottom of a bearish Descending Triangle chart pattern, as expected. Prices attempted to recover after breaking counter-trend support and even managed to set a higher swing top, but the effort fizzled. A bearish Evening Star coupled with negative RSI divergence now reinforces the case for a reversal.

    AUD Technical Analysis-audusd1007.gif

    From here, the next significant layer of support seems to be in the 0.6827-65 area, marked by recent attempts to challenge trend-defining support at the January 2016 low. Securing a break below that on a daily closing basis probably opens the door for a challenge of the 2019 spike low at 0.6744. The outermost layer of downward-sloping trend resistance is now at 0.7088.

    Zooming out to the weekly chart, overall technical positioning continues to suggest the AUDUSD downtrend started in early 2018 has resumed following a period of congestion. While the support at 0.6827 is yet to be broken, measuring the width of the Descending Triangle pattern defining the digestive period prior to breakdown implies a steeper decline to test the 0.67 figure.

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