Trade of the Day: AUD/USD
By: Dima Chernovolov
AUD/USD continues to fall inside the daily Down Channel chart pattern which was previously identified by Autochartist. Autochartist rates the quality of this Down Channel at the 7-bar level – which is the result of the slow Initial Trend (2 bars), above-average (6 bars) and strong Clarity (8 bars). AUD/USD is expected to fall further inside this Down Channel – in line with the earlier downward reversal from the key resistance area shown below.
As can be seen from the daily AUD/USD chart below, the pair recently reversed down from the resistance area lying between the key round resistance level 0.7000 (former multi-month support level from March and April), upper daily Bollinger Band, 50-day moving average and the 38.2% Fibonacci correction of the previous sharp downward impulse from April. The proximity of this resistance area and the strength of the active daily downtrend increase the probability AUD/USD will continue to fall inside this Down Channel.