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Talking Points:
- AUD/USD Technical Strategy: Flat
- Aussie Dollar Recovery Poised to Continue After Prices Hit 3-Week High
- Upswing Seen as Corrective in the Context of a Long-Term Down Trend
The Australian Dollar looks set to continue the recovery against its US counterpart having cleared chart resistance en route to the highest level in three weeks. The dominant long-term trend still favors the downside however, suggesting the upswing is corrective.
Near-term resistance is at 0.7136, the 61.8% Fibonacci retracement, with a break above that on a daily closing basis opening the door for a challenge of the 76.4% level at 0.7209. Alternatively, a reversal below resistance-turned-support at 0.7077, the 50% Fib, paves the way for a re-test of the 38.2% retracement at 0.7018.
Our fundamental outlook continues to envision AUD/USD weakness. An actionable short entry signal is absent for now and the latest break of near-term resistance hints at continued gains for now. With that in mind, we will stand aside and wait for the upswing to fizzle, looking for an actionable selling opportunity to emerge thereafter.
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