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- AUD/USD Technical Strategy: Flat
- Support: 0.9025 (23.6% Fib ret., trend line), 0.8955 (38.2% Fib ret.)
- Resistance: 0.9132 (Mar 7 high)
The Australian Dollar may be carving out a top against its US counterpart, with prices showing a Bearish Engulfing candlestick pattern. Breaking below support at 0.9025, marked by the 23.6% Fibonacci retracement and a rising trend line set from early January, initially exposes the 38.2% level at 0.8955. Near-term resistance is at 0.9132, the March 7 high.
Risk/reward considerations argue against entering short with prices so close to support. On the other hand, taking up the long side looks premature absent a defined reversal signal. We will continue to stand aside until a more actionable setup emerges.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com