Forex: AUD/USD Technical Analysis – Slowing Inching Toward Support
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- AUD/USD Technical Strategy: Short at 0.90
- Support: 0.8919 (14.6% Fib exp.), 0.8821 (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 has started to cautiously inch lower, but follow-through has been relatively limited so far. Still, the emergence of negative RSI divergence appears to bolster the case for further weakness.
We will continue to hold short for now, initially targeting the 14.6% Fibonacci expansion at 0.8919. A daily close below this barrier exposes the 23.6% level at 0.8821. 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
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.