AUD/USD Technical Analysis: Waiting to Confirm Reversal
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- AUD/USD Technical Strategy: Flat
- Support:0.8784, 0.8706, 0.8641
- Resistance:0.8887, 0.8971, 0.9073
The Australian Dollar may be gearing up to resume the down trend against its US namesake following the appearance of a Bearish Engulfing candlestick pattern. Near-term support is at 0.8784, the intersection of a rising trend line and the 14.6% Fibonacci expansion, with a break below that on a daily closing basis exposing the 23.6% level at 0.8706. Alternatively, a turn above support-turned-resistance at 0.8887, the March 2014 low, clears the way for a test of the 38.2% Fib retracement at 0.8971.
Entering short seems premature for now absent confirmation of a reversal on a break of trend line support. On the other hand, the absence of clearly defined bullish cues warns against taking up the long side. We will remain flat for now until greater clarity emerges.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com