Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
The AUDUSD is lower today for the fourth straight session.
It comes following a rejection of descending channel resistance at 0.7070. The pair is also below its July open of 0.7026 and has been trending lower since January of last year.
With all that in mind, things still look relatively bearish for AUDUSD.
That statement will become more pervasive if AUDUSD closes below the smaller channel support in the chart below.
Such a close would likely trigger the next leg lower for the Australian dollar.
And this wouldn’t be the first time a short-term ascending channel has attracted sellers during this two-year downtrend.
Notice what happened in late April.
That breakdown on April 24th went on to produce a 230 pip drop for the pair.
A close below ascending channel support near 0.6960 could trigger a similar move lower.
If we do get a breakdown over the coming sessions, I will use the larger descending channel to identify a profit target along the way.
Alternatively, a daily close above the 0.7050 area would negate or at least delay this idea.