AUDUSD: What A Great Setup

The dollar ended last week with a bang! It seems that the US dollar has finally strengthened and we are returning to the bullish trend. One of the best examples on the market is AUDUSD, where the technical situation is very promising for potential sellers.

First of all, the price bounced from the long-term downwards trend line (black), which has been connecting lower highs since the beginning of the year. Actually, the price tested that resistance twice, which brings us to the another factor: a double top formation. But wait, there is more! The second top is a shooting star on the daily chart. In addition to that, the recent correction was a flag and we broke lower line of this formation. Want more? After the bigger flag, AUDUSD created a smaller one (green) and the price is currently breaking the lower line of this formation, giving us a fresh sell signal. It looks nice, and to be honest, I do not see any positive factors here.

The sell signal will be cancelled when the price breaks the black line, which for the time being, is less likely to happen. As for the potential target, September’s lows seem like a great place and AUDUSD should have its sights set there.