AUD/USD Technical Analysis: Long-Term Decline Resuming?
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- AUD/USD Technical Strategy: Flat
- Aussie Breaks 9-Day Winning Streak, Forms Bearish Evening Star Candle Pattern
- Opting to Pass on Entering Short Trade Until Risk/Reward Parameters Improve
The Australian Dollar issued the largest daily decline in nearly two months against its US counterpart having found resistance below the 0.74 figure. The move lower ends an impressive nine-day winning streak, the lowest such string of gains in over six years. Prices have now completed a bearish Evening Star candlestick pattern, hinting a larger downward reversal may be ahead.
From here, a daily close below the 14.6% Fibonacci expansion at 0.7199 opens the door for a challenge of the 23.6% level at 0.7086. Alternatively, a reversal back above the 38.2% Fib retracement at 0.7387 clears the way for a challenge of the 50% threshold at 0.7535.
We have been keen to re-enter short AUDUSD once the latest upswing runs out of steam and the longer-term down trend regains momentum. Initiating the trade now looks unattractive from a risk/reward perspective however as prices hover within a hair of support. With that in mind, we will remain on the sidelines for the time being until a more compelling opportunity emerges.
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