AUD/USD Technical Analysis: Eyeing Resistance Below 0.74
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- AUD/USD Technical Strategy: Flat
- Australian Dollar Poised to Complete Longest Winning Streak in Over Six Years
- Waiting for Discernible Short Entry Signal to Sell in Line with Dominant Trend
The Australian Dollar is working on its ninth consecutive daily advance against its US namesake, a winning streak unmatched in over six years. In early 2009, the last such rally was followed by a further gain of over 28 percent in the subsequent seven months (though naturally the likelihood of repeating this feat is impossible to discern with certainty).
Near-term resistance is now at 0.7387, the 38.2% Fibonacci retracement, with a break above that on a daily closing basis exposing the 0.7535-59 area marked by the 50% level and the March 11 low. Alternatively, a reversal back below the 23.6% Fib at 0.7204 – now recast as support – opens the way for a retest of the 14.6% retracement at 0.7091.
Neither a long nor a short position looks attractive at current levels. Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal means taking up the short side seems premature. We will remain flat for now. The dominant trend still looks bearish and we will look for a reversal signal to enter short as the rally fizzles.
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