AUD/USD Technical Analysis: Support Now Below 0.71 Mark
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- AUD/USD Technical Strategy: Flat
- Aussie Support Now Below 0.71 vs. US Counterpart as Down Move Regains Momentum
- Tactically Passing on Short Trade for Now as FOMC Policy Announcement Looms Ahead
The Australian Dollar accelerated downward anew after brief period of consolidation above the 0.72 figure against its US counterpart. Prices established a top and turned lower as expected having produced a bearish Evening Star candlestick pattern.
The next layer of support is 0.7086, the intersection of a rising trend line guiding the move higher since early September and the 23.6% Fibonacci expansion. A break below this barrier on a daily closing basis opens the door for a test of the 38.2% level at 0.6903. Alternatively, a move back above the 14.6% expansion at 0.7199 – now recast as resistance – clears the way for a challenge of the 38.2% Fib retracement at 0.7387.
While one layer of event risk has passed with Australia’s CPI data, the upcoming FOMC policy announcement remains a critical source of uncertainty in the hours ahead. It seems tactically ill-advised to commit to a directional bias prior to such a key inflection point, especially since we are already holding long-USD exposure elsewhere. With that in mind, we will remain flat and monitor developments for a selling opportunity.
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