Forex: AUD/USD Technical Analysis – Ready to Turn Lower Again?
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- AUD/USD Technical Strategy: Flat
- Support: 0.8918 (23.6% Fib ret.), 0.8819 (14.6% Fib)
- Resistance: 0.8996 (trend line), 0.9079 (38.2% Fib ret.)
The Australian Dollar recovered as expected against its US namesake having shown a bullish Piercing Line candlestick pattern. A Doji candle below resistance at a falling trend line set from early December 2013 points to indecision and hints prices may reverse lower anew. Breaking below support at 0.8918, the 23.6% Fibonacci retracement, exposes the 14.6% level at 0.8819. Alternatively, a daily close above the trend line (now at 0.8996) clears the way for a challenge of the 38.2% Fib at 0.9079.
Risk/reward considerations argue against entering short absent confirmation or betting on continuation of the near-term uptrend given reversal warning signs. The longer-term trajectory seems to favor the downside and we will wait for a clear-cut bearish signal to emerge to look for selling opportunities.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com