Forex: AUD/USD Technical Analysis – Holding Aussie Short Position
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- AUD/USD Technical Strategy: Short at 0.90
- Support: 0.8906 (14.6% Fib exp.), 0.8807 (23.6% Fib exp.)
- Resistance: 0.9051-85 (Jan 13 close and high, possible double top)
We sold the Australian Dollar last week after prices put in a bearish Evening Star candle formation, hinting a double top may be in place in the 0.9051-85 area (marked by the January 13 closing and swing highs). The pair continues to tread water below resistance for the time being but the emergence of negative RSI divergence seems to bolster the case for a forthcoming reversal.
We will continue to hold short for now, initially targeting the 14.6% Fibonacci expansion at 0.8906. A daily close below this barrier exposes the 23.6% level at 0.8807. A stop-loss will be activated on a close above 0.9085.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com