AUD/USD – Breaking the downtrend?

Can it maintain momentum?

The Aussie dollar has been on a decent run in recent weeks against the greenback but it’s suddenly struggling around an important area of resistance.

The pair has been in a downward trend for a little over a year and the top of the descending channel falls between the 50 and 61.8 fib levels and around 0.73, near the same level it failed at last week.

A move above here would look like quite a bullish breakout but there may still be one more big obstacle in the way. The 200/233-day SMA band falls a little above here around the 61.8 fib and January highs.

This could be a big test for the pair and may even trigger some profit-taking on approach, which the momentum indicators could highlight.

A move above here could propel the pair higher and signal the start of a much greater uptrend.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam