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Fan Yang

AUD/USD Threatening to Break Short-term Channel Support

AUD/USD has been trading in a rising channel for most of May. But the prevailing trend has been bearish in the medium-term, so a bearish breakout from this triangle could signal bearish continuation.

AUD/USD 4H Chart

(click to enlarge)

Rising Channel Stalls:
- Price went from a low around 0.7330 to crack 0.75.
- Within this channel we can see higher lows and higher highs, until the latest high which retreated when testing the previous high. - - This suggests price will break the channel support on its way down.
Breakout Scenario:
- A break of the channel, plus an inability to climb back above 0.78 would be a good sign for the bearish scenario.
- The bearish scenario opens up 0.7420 in the very short-term, and the 0.7330 below that. (Inability to break below 0.7420 could signal that bulls are taking over.)
- Below 0.73, AUD/USD has the 0.7145-0.72 area as a year-long range support (since May 2016). 

AUD/USD Daily Chart

(click to enlarge)

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