AUD/USD Technical Analysis: Wedge Break Hints at Gains
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- AUD/USD Technical Strategy: Flat
- Support:0.9308, 0.9282, 0.9240
- Resistance: 0.9351, 0.9386, 0.9421
The Australian Dollar advanced as expected against its US counterpart, confirming the formation of a Falling Wedge chart pattern. Near-term resistance is at 0.9351, the 38.2% Fibonacci expansion, with a break above that on a daily closing basis exposing the 50% level at 0.9386. Alternatively, a reversal below the 23.6% Fib at 0.9308 clears the way for a test of the 14.6% level at 0.9282.
We are tactically opting not to pursue a long position as a downward reversal from the S&P 500 warns of oncoming risk aversion that may sink the sentiment-sensitive Australian unit. Indeed, the correlation between the stock index and AUD/USD is now 0.83 (on rolling 20-day studies).
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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.