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AUD/USD Technical Analysis – Upturn Confirmation Pending

AUD/USD Technical Analysis – Upturn Confirmation Pending

2014-05-07 21:18:00
Ilya Spivak, Sr. Currency Strategist
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Talking Points:

  • AUD/USD Technical Strategy: Flat
  • Support: 0.9318 (14.6% Fib exp.), 0.9259 (Flag top)
  • Resistance: 0.9351 (trend line), 0.9390 (23.6% Fib exp.)

The Australian Dollar broke higher to complete a bullish Flag chart formation but the case for further gains lacks adequate confirmation for now. Prices are testing support-turned-resistance marked by a rising trend line set from late January (now at 0.9351). A break higher initially exposes the 23.6% Fibonacci expansion at 0.9390. Alternatively, a turn below the 14.6% level at 0.9318 clears the way for a retest of the Flag top, currently at 0.9259.

Risk/reward considerations argue against entering long with prices squarely at resistance. On the other hand, support is too close to justify a short from the same perspective. We will continue to stand aside for now, waiting for the pair to offer greater clarity before committing to a directional bias.

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AUD/USD Technical Analysis – Upturn Confirmation Pending

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.

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