Bearish Reversal In Aussie Dollar As Yellen Speaks

Share news

The Australian Dollar (AUD) extended downside movement against the US Dollar (USD) on Friday, dragging the price of AUDUSD to less than 0.7650 after the emergence of a bearish engulfing candle on the daily chart. The technical bias already remains bearish because of a Lower Low in the recent downside move.

Technical Analysis

As of this writing, the pair is being traded near 0.7624. A support may be found around 0.7600, the psychological number ahead of 0.7567, a key horizontal support and then 0.7500, the confluence of the psychological number as well as the major horizontal support area as demonstrated in the given below daily chart.

Bearish Reversal In Aussie Dollar As Yellen Speaks

On the upside, the pair is expected to face a hurdle near 0.7644, a major horizontal resistance area ahead of 0.7667, the 50% retracement of the yesterday’s daily candle and then 0.7732, the swing high of the latest major upside rally. The technical bias will remain bearish as long as the 0.7732 resistance area is intact.

Yellen’s Remarks

Federal Reserve Chair Janet Yellen made no comments on the outlook for the U.S. economic and monetary policy in brief prepared remarks on Thursday regarding the importance of diversity in the financial sector. Yellen was to deliver a speech, in which she repeated her pledge to try to make the Fed itself more diverse, at the conference of minority bankers in Kansas City on Thursday.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.