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Fan Yang

AUD/USD - a Short-term Bearish Outlook

AUD/USD has been choppy in 2018. The daily chart below shows that after a run up in December into January, price started to retreat in February and might continue to do so in March.

AUD/USD Daily Chart

(click to enlarge)

Consolidation, Bearish Scenario:
- First of all, price has been choppy throughout 2016 and 2017, meaning there was no clear sign of direction.
- Eventually, AUD/USD did make higher lows and higher highs by the end of 2017. 
- The thing is, this is not the structure of a healthy uptrend.
- The fact that price failed to make a new high in late January shows that AUD/USD is probably in a sideways market.
- In the short-term, we might have some bearish outlook IF price can hold under 0.79, which is where price is now during the start of the 3/14 Asian session.
- In this bearish scenario, we can anticipate a push towards 0.77 and possible 0.7650. 
- This is a conservative bearish outlook, because in a sideways market, there is downside to the 0.75 support pivot from December. (see weekly chart below)
Bullish Scenario:
- Now if price holds above 0.7750 and pushes back to the 0.81 resistance. I would anticipate a break because it would show a bullish bias. 
- This bullish bias would be based on the fact that price anchored above the projected sideways range we see on the weekly chart (where the upwards channel turns into a sideways channel). 
- Also note that if price holds above 0.7750 and pushes to 0.81, it means price held above the cluster of moving averages, another strong bullish sign.

AUD/USD Weekly Chart

(click to enlarge)