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AUD/USD Technical Analysis: Waiting to Sell Aussie Anew

AUD/USD Technical Analysis: Waiting to Sell Aussie Anew

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Talking Points:

  • AUD/USD Technical Strategy: Flat
  • Aussie Dollar Sellers Struggle with Follow-Through Below 0.72 Figure vs. US Dollar
  • Opting to Wait for Better Risk/Reward, Passage of Event Risk Before Re-Entering Short

The Australian Dollar is struggling to make headway below the 0.72 against its US namesake having declined as expected after putting in a bearish Evening Star candlestick pattern. We entered short AUD/USD at 0.7290 and subsequently booked profit on half of the position. The remainder of the trade was stopped out at the breakeven level.

Near-term support remainsat 0.7199, the 14.6% Fibonacci expansion. A break below this barrier on a daily closing basisclears the way for a test of the 0.7056-86 area, marked by a rising trend line and the 23.6% level. Alternatively, a move above the 38.2% Fib retracement at 0.7387 opens the door for a challenge of the 50% mark at 0.7535.

Re-entering short looks unattractive from a risk/reward perspective at current levels. Furthermore, potentially disruptive event risk by way of Australian CPI figures and the FOMC policy announcement looms ahead. We will stay flat for now.

Losing Money Trading Forex? This Might Be Why.

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