AUD/USD long term technical analysis December 2017

AUD/USD time to resume bearish trend?

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The bull has shown its face at the start of November and attempts to bring AUD/USD higher. Entering the middle of November, the bear return and push the pair lower. There is a minor bounce after the pair touched 0.7550, but the bounce could not turn the trend, and AUD/USD slide deeper in December.

U.S tax-reform has passed a tax bill which was well received by the market. However, the tax-bill also accompanied by AMT (Averages minimum taxes) of 20% which limit the benefit of the tax break. On Australia side, October trade balance came out much worse than expected. The market expected a surplus of 1.37b, while actual data show a surplus of 0.11b.

Australia trade balance hit by the slump in iron ore and coal export. Iron ore export down MoM 10% to $7 billion while coal export down 3% to $4.3 billion. Analyst presume the pollution control in China is the cause of lower export and the situation will continue in the coming year.

New Month

Monthly chart

AUD/USD resume its downtrend after November bearish close. The close put the pair inside the triangle consolidation. The pair tested the top of the triangle in December before rejected and moved below its opening level. The target of this downward movement is the bottom of the triangle.

Weekly chart

 

The week has not closed yet, and the pair makes a sharp down move after testing the top of triangle consolidation. Overall, the picture is the same as shown on the monthly chart. Without any change to the sentiment, it looks like AUD/USD will test the bottom of triangle soon.

Daily chart

 

There is only one direction to move for AUD/USD at the current time. The pair is moving inside the orange bearish channel and will continue to move inside it. The nearest support is the bottom of the triangle as shown on the weekly chart.

Trade plan

A long position could be taken when the pair tested the bottom of the triangle and formed a bullish pattern.

A short position might need to wait until the pair makes another test of the top triangle pattern. Another short position to consider is the break below the bottom of triangle and re-test of it.

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