Forex: AUD/USD Technical Analysis – Trend Line Marks Resistance
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- AUD/USD Technical Strategy: Flat
- Support: 0.8918 (23.6% Fib ret.), 0.8819 (14.6% Fib)
- Resistance: 0.8974 (trend line), 0.9079 (38.2% Fib ret.)
The Australian Dollar advanced against its US counterpart as expected after producing a bullish Piercing Line candlestick pattern. Prices overcame resistance at 0.8918, the 23.6% Fibonacci retracement, to challenge a falling trend line set from early December (now at 0.8974). A break above this barrier on a daily closing basis targets the 38.2% Fib at 0.9079. Alternatively, a move back below 0.8918 aims for the 14.6% retracement at 0.8819.
Risk/reward considerations argue against taking a trade at current levels with prices wedged tightly between relevant near-term support and resistance levels. We will opt to stand aside for now, waiting for the pair to yield a more attractive setup.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com