AUD/USD has been stuck in an ascending channel pattern for sometime. And, the pair has finally managed to break off the pattern to the downside. Where will it go next?
The poor performance of the Aussie is attributed to the worse-than-expected MI inflation figures and poor economic data from China. MI inflation was released at 2.4% against the previous reading of 2.3%. And, the Chinese foreign direct investment dropped by a staggering 3.6%. As a result, this resulted in a massive Aussie selloff.
As earlier mentioned, technical analysis on the AUD/USD reveals it has broken off its ascending channel pattern. If the pair continues with its move downwards, it may encounter support at 1.0290 before moving lower. On the other hand, if it starts recovering its losses, it may encounter resistance at 1.0500 before moving higher.
The pair is on a downtrend in the short term. Thus, traders who were short in the pair should continue holding on to their positions as long as the bearish pressure is still evident.
DISCLOSURE & DISCLAIMER: THE ABOVE IS FOR INFORMATIONAL PURPOSES ONLY AND NOT TO BE CONSTRUED AS SPECIFIC TRADING ADVICE. RESPONSIBILITY FOR TRADE DECISIONS IS SOLELY WITH THE READER.