Forex: AUD/USD Technical Analysis – Still Holding Short Position
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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)
We entered short AUD/USDafter prices put in a bearish Evening Star candle formation, suggestingthe currency may be carving out a top in the 0.9051-85 area (marked by the January 13 closing and swing highs). The emergence of negative RSI divergence bolsters the case for further weakness.Prices descended to our initial target at 0.8919, the 14.6% Fibonacci expansion, but have since stalled.
A series of back-to-back indecision candles warns a bounce may be ahead but the overall structure of the short-term down trend remains intact. We will remain short for now, initially looking for a daily close below 0.8919to expose 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.