AUD/USD TECHNICAL OUTLOOK: BEARISH
- Australian Dollar idling near 2019 low against US counterpart
- Long-term chart setup flags room for substantially deeper drop
- Invalidation point for near-term bearish bias now above 0.70
The
Australian Dollar continues to idle above support marked by the 2019
swing low at 0.6827 as traders struggle to establish conviction. A break
downward confirmed on a daily closing basis initially opens the door to
challenge the August 7 swing low at 0.6677.
Resistance
stands in the 0.6827-65 area, a former support shelf. A turn back above
that faces a minor barrier at 0.6911, the July 10 low. Neutralizing the
broadly bearish bias in overall positioning probably requires a close
above trend resistance set from December 2018, now at 0.7033.
Zooming
out to the monthly chart for a bit of perspective is a useful exercise
amid choppy near-term price action. Here we see prices have breached the
bounds of an 18-year rising trend as well as a support block capping
downside progress since September 2015.
The
implications appear to be quite dire. Not only has the structural trend
seemingly shifted to point downward, but the next layer of significant
support looks to be some ways away, starting at 0.6352. That speaks to
space for a further depreciation in excess of 6 percent in the months
ahead.
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