AUD/USD Technical Analysis: Topping Ahead of FOMC?
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- AUD/USD Technical Strategy: Flat
- Bearish candlestick pattern hints Aussie may be topping vs. US Dollar
- Risk/reward parameters, FOMC event risk argue for patience on short
The Australian Dollar edged lower against its US counterpart after testing pivotal support-turned-resistance below the 0.76 figure. Prices have now carved out a bearish Evening Star candlestick pattern, hinting a reversal downward may be in the cards ahead.
Near-term support is at 0.7438, the 76.4% Fibonacci expansion, with a break below that on a daily closing basis opening the door for a test of the 61.8% level at 0.7375. Alternatively, a push back above the 100% Fib at 0.7540 sees the next upside barrier at 0.7589, a former range floor in play from March to July 2015.
Our 2016 fundamental outlook favors continuation of the long-term AUD/USD down trend, painting recent gains as corrective. Prices are too close to near-term support to justify selling the pair here from a risk/reward perspective. Furthermore, positioning may be materially altered by the upcoming FOMC policy announcement. With that in mind, we will remain flat.
FXCM traders have trimmed short AUD/USD positions.Find out what that hints about the trend!