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AUD/USD Technical Analysis: Waiting to Re-Enter Short

AUD/USD Technical Analysis: Waiting to Re-Enter Short

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Talking Points:

  • AUD/USD Technical Strategy: Flat
  • Rebound Extends for Fifth Day as Prices Post Largest Daily Gain in a Month
  • Waiting for New Short Trade Opportunity After Corrective Advance Fizzles

The Australian Dollar moved higher for a fifth consecutive day against its US counterpart, putting in the largest daily advance in a month. The currency accelerated upward in the aftermath of October’s RBA monetary policy announcement.

From here, buyers are looking to challenge the 23.6% Fibonacci retracement at 0.7204. A break above this barrier on a daily closing basis opens the door for a test of the 38.2% level at 0.7387. Alternatively, a reversal back below the 14.6% Fib expansion at 0.7096 – now recast as support – clears the way for a challenge of the 0.6946-83 area (trend line, 23.6% expansion).

We sold AUDUSD at 0.7090 and subsequently booked profit on half of the position. The remainder of thetrade was stopped out at breakeven amid the latest upswing. The advance appears to be corrective in the context of a longer-term down trend. With that in mind, we will remain on the sidelines for now and wait for the upswing to yield a new selling opportunity.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.