AUD/USD Technical Analysis: Down Trend Resuming?

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Talking Points:

• AUD/USD Technical Strategy: Flat
• Support: 0.7715, 0.7632, 0.7566
• Resistance:0.7766, 0.7818, 0.7880

The Australian Dollar may be readying to turn lower against its US counterpart after prices put in a bearish Three Inside Down candlestick pattern. A daily close below 23.6% Fibonacci expansion at 0.7715 exposes the 38.2% level at 0.7632. Alternatively, a reversal above the 14.6% Fib at 0.7766 clears the way for a test of the 0.7813-18 area (38.2% Fib retracement, June 3 high).

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, waiting for an actionable opportunity to present itself.

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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com