Forex: AUD/USD Technical Analysis – Wedge Warns of Weakness
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- AUD/USD Technical Strategy: Flat
- Support: 0.9046 (Wedge support), 0.8955 (38.2% Fib ret.)
- Resistance: 0.9132-50 (Mar 7 high, Wedge top), 0.9177 (38.2% Fib exp.)
The Australian Dollar may be readying to turn lower against its US counterpart as prices trace out Rising Wedge chart formation, a setup typically indicative of an oncoming bearish reversal. Negative RSI divergence bolsters the case for a downside scenario. Wedge floor support is now at 0.9046, with a break below that initially exposing the 38.2% Fibonacci retracement at 0.8955. Near-term resistance lines up in the 0.9132-50 area, marked by the March 7 high and the Wedge top. Pushing above that targets the 38.2% Fib expansion at 0.9177.
Confirmation of the Wedge setup requires a daily close below the pattern’s lower boundary. We will wait for this to materialize to begin looking for a viable short entry opportunity.
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.