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Talking Points:
- AUD/USD Technical Strategy: Flat
- Support:0.8160, 0.8031, 0.7957
- Resistance:0.8239, 0.8367, 0.8471
The Australian Dollar rebounded against its US counterpart as expected after producing a Hammer candlestick reinforced by positive RSI divergence. A daily close above the 23.6% Fibonacci retracement at 0.8239 exposes the 38.2% level at 0.8367. Alternatively, a turn below rising trend line support at 0.8160 clears the way for a challenge of the January 7 low at 0.8031.
Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
