AUD/USD Testing its Double Bottom

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AUD/USD Testing its Double Bottom

AUD/USD started the year falling to a new low at 0.8035 but found support there. After showing support there twice, the pair formed a double bottom and broke above its neckline last week after mixed US jobs data. Let’s take a look at the charts to assess the price action.

After breaking above the double bottom neckline at 0.8156, AUD/USD retreated from about 0.8250. It has returned to the the 0.8130-0.8150 area ,the middle of 2015’s price range so far. If price can hold above the 0.8130 level, and return above 0.82, the short-term outlook remains bullish towards the 0.8255 and 0.83 handle. At 0.83, there will be a falling trendline on the daily chart, so we should expect resistance.

Now, if price falls below 0.8130, pressure is likely back to the 0.8035 low with risk of breaking towards the 0.80 handle later this week or in the upcoming one. There might be some support around 0.81 as well so we should monitor a reaction there. If the attempt fails to return price above 0.8150, AUD/USD should remain bearish.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.