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Talking Points:
- AUD/USD Technical Strategy: Flat
- Aussie Dollar puts in best five-day winning streak in five years vs. USD
- Gains seen as corrective but actionable short trade setup absent for now
The Australian Dollar has put in the best five-day winning streak in over four years last week, clearing double top resistance and establishing a foothold above the 0.74 figure. The currency found fuel in a steady stream of upbeat news-flow last week, beginning with a supportive RBA announcement and continuing to a strong set of four-quarter GDP figures.
Near-term resistance is at 0.7439, the 76.4% Fibonacci expansion, with a break above that on a daily closing basis opening the door for a test of the 100% level at 0.7541. Alternatively, a reversal below the 61.8% Fib at 0.7376 paves the way for a test of the 50% expansion at 0.7325.
We expect the long-term AUD/USD down trend to resume in line with our 2016 fundamental forecast, making current gains appear corrective. An actionable bearish reversal signal is absent however, arguing against pulling the trigger on a short trade. We will remain flat for now, waiting for a more compelling opportunity to present itself.
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