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Talking Points:
- AUD/USD Technical Strategy: Flat
- Support: 0.7857, 0.7706, 0.7559
- Resistance:0.8058, 0.8221, 0.8384
The Australian Dollar overturned the near-term uptrend played out against its US namesake in the past three weeks, hinting the larger down trend could be resuming. Near-term support is in the 0.7706-50 area (range mid-line, 23.6% Fibonacci expansion), with a break below that on a daily closing basis exposing the 0.7548-59 zone (range support, 38.2% level). Alternatively, a move above the 0.7874-0.7900 region (range top, 14.6% expansion) opens the door for a test of the 38.2% Fib retracement at 0.8059.
While entering short is a tempting proposition, we will tactically opt to stand aside. We suspect upcoming RBA monetary policy announcement may derail bearish technical positioning. As such, we will wait for event risk before committing to a position.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
