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Talking Points:
- AUD/USD Technical Strategy: Flat
- Support:0.8126, 0.8047, 0.7919
- Resistance:0.8254, 0.8369, 0.8472
The Australian Dollar advanced against its US counterpart as expected after shoring a Hammer candlestick bolstered by positive RSI divergence. Near-term resistance is in the 0.8241-54 area, marked by the January 12 high and the 23.6% Fibonacci retracement, with a break above that on a daily closing basis exposing the 38.2% level at 0.8369. A bearish Dark Cloud Cover pattern now warns renewed weakness may be ahead however. A reversal below the 14.6% Fib expansion at 0.8129 opens the door for a test of the 23.6% threshold at 0.8047.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests that taking up the long side is premature. With that in mind, we will remain flat for now.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
