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Talking Points:
- AUD/USD Technical Strategy: Flat
- Support:0.9320, 0.9263-70, 0.9239
- Resistance: 0.9369-75, 0.9401, 0.9440
The Australian Dollar moved lower against its US counterpart as expected after pitting in a Bearish Engulfing candlestick pattern. Seesaw volatility over the past two sessions have left the pair little-changed. A move below 0.9320 exposes the 0.9263-70 area marked by a rising trend line set from early April and the 38.2% Fibonacci expansion. Alternatively, a turn above the 0.9369-75 zone bracketed by upward-sloping support-turned-resistance and the 50% Fib retracement clears the way for a test of the 61.8% level at 0.9401.
Risk/reward considerations argue against entering short with prices 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
