Abdallah
Short

AUD/USD : Is 0.76104 the key to the deadlock?

FX:AUDUSD   Australian Dollar / U.S. Dollar
17 0 0
AUD/USD             has been trading within range (0.742-0.764) all July. Some fierce resistance was at 0755, 0.761 and 0.764 levels. Meanwhile, 0.742 was July's major support with 0.749 acting as a front line support that kept bears from taking over.

Friday trading saw the pair failing its last attempt to break the 0.749 levels before it spiked towards 0.76104 (23rd June resistance level ) after a disappointing US GDP reading. The pair closed below the 76c mark ahead of a week that carries a tough interest rate decision from RBA on Tuesday afternoon.

Interestingly, it appears that the classic two heads and a shoulder pattern was in formation on Friday, with the shoulders at exactly 0.76104 (23rd June - 29th July) and the head at 15th of July high at 0.76765 !

Obviously, that pattern will be invalidated if the 23rd of June high of 0.76474 is broken. However, the RSI descending trendline suggests that we are due for a bearish corrective action with 0.755 is the first support to be tested, followed by 0.752 level. A break below 0.752 would facilitate the bearish takeover of the 0.749 (which I believe won't be fighting any longer) and take us towards lower 74c levels.

My positioning:

I'm bearish on AUD/USD            
SL 0.765
TP1 0.742
TP2 0.733
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