AUD/USD: Bearish Channel Persists
The Forex market has seen much more life in it lately compared to the previous quiet year of mostly consolidative moves in USD currency pairs, but that has changed over the past few weeks. With the US Dollar finding direction and the Federal Reserve animated by more decisive and hawkish sentiment, and the focus switching from rate cuts to the prospect of at least one rate hike over the remainder of 2026, macro drivers are starting to really affect prices.
We do not see a very long-term trend now, but what we do see is an increasingly established medium-term bearish trend, with notable strength in the USD and notable relative weakness in the AUD, and this is leading traders to see this currency pair as an increasingly interesting vehicle. It is also notable that the Aussie seems to have become uncoupled to some extent from its previous role as a risk barometer and may now be becoming more of a commodity currency.
Top Regulated Brokers
The current environment is generally one of bearish commodities: crude oil, gold, silver, and various ores that Australia is a major exporter of are all at multi-month low prices, or very near to them. The Australian Dollar can be an interesting and less volatile proxy for trading commodities.
Looking at the price chart below, we can see evidence that bears have good technical reasons to feel like they have an edge, and to be looking for lower prices.
We see a medium-term bearish trend which is orderly and symmetrical, meaning it is more likely to hold. The quality of the channel is proven by the linear regression analysis study I have imposed there. The descending price channel has now survived for two months with almost no violations of its boundaries.
The US Dollar Index has recently made a new bullish breakout to a fresh 13-month high price, although it is now consolidating not far from that high price. The Australian Dollar is notable as one of the most consistently weak major currencies, along with the Japanese Yen.
Drilling down to a shorter timeframe, we can see that the price has rejected the nearest overhead resistance at $0.6925 but is again finding support near $0.6880. Above the nearest resistance, there are several other levels quite close together, meaning it will probably be hard for the price to move upwards through that price area.
My Take on AUD/USD
It might be possible to scalp – make a very short-term trade – on the long side, from a bullish bounce at $0.6880. The better and more long-term opportunity will likely be on the short side, and a good entry trigger for this could either be another trip higher to $0.6925 (confluent with a quarter-number), or a decisive breakdown below $0.6880, ideally with a failed retest from below. There is a multi-month low just a few pips below that, so a successful short trade will quickly be trading in “blue sky”.
Most of the time, Forex markets do not show clear direction. Lately, it does, and these are the times when it can be important to seize opportunities.
Review, Support & Resistance Levels
My previous AUD/USD signal on 24th June was not triggered.
Risk 0.25%.
Trades must be taken before 5pm London time Thursday.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $0.6925, $0.6942, or $0.6959.
Put the stop loss 1 pip above the local swing high.
Move the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
Long Trade Ideas
Long entry following a bullish price action reversal on the 1H1 time frame H1H1H1 time frame immediately upon the next touch of $0.6880 or $0.6834.
Put the stop loss 1 pip below the local swing low.
Move the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
There is nothing of high importance scheduled today concerning the Australian Dollar. Regarding the US Dollar, there will be a release of ISM Manufacturing PMI data at 3pm London time.
Ready to trade our free Forex signals? Here is our list of the best Forex brokers worth checking out.