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Talking Points:
- AUD/USD Technical Strategy: Flat
- Support:0.9305, 0.9223, 0.9181
- Resistance: 0.9422, 0.9507, 0.9602
The Australian Dollar turned downward against its US counterpart as expected after the pair produced a Dark Cloud Cover candlestick pattern. Support lines up in the 0.9305-24 area, marked by a horizontal pivot in play since March and the 23.6% Fibonacci retracement. A break below that on a daily closing basis exposes the 0.9181-223 zone, bracketed by a range bottom and the 38.2% level. Alternatively, a reversal above support-turned-resistance at 0.9422 opens the door for a test of the 38.2% Fib expansion at 0.9507.
Risk/reward considerations argue against entering short with prices sitting in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
