The Australian dollar has lost over 8% in value since the beginning of the year, but for several months it remained in the range of 400 pips, between 80.50 and 84.50. The price has recently returned back to this range, and now it has reached a significant resistance placed inside. The first bearish reaction appeared here. Is this an opportunity to play for declines?
At the end of August, after an unsuccessful attack on resistance, 81.60 AUDJPY collapsed and reached the minimum at 78.70. Now we are dealing with increases, which reached the abovementioned resistance at 81.60 and have weakened somewhat. This can be an opportunity to enter a short position.
If we look at the daily chart, we will see that the resistance at 81.60 has been a barrier to the price several times before. The best example is the upward rebound from April 2017 and the recent stopping of bulls at the turn of August and September. A good scenario seems to be playing on the dips with the goal at 78.70, where there has recently been a retreat. More cautious investors should aim at the lower range of consolidation – 80.50.