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- AUD/USD Technical Strategy: Flat
- Australian Dollar stalls at highest levels in nearly nine months vs. USD
- Negative RSI divergence hints a downturn may be in the cards ahead
The Australian Dollar has settled into a consolidation range after rising to the highest level in close to nine months against its US namesake. Negative RSI divergence hints that upside momentum is fading, which may precede a downside reversal.
A daily close below the March 22 low at 0.7551 opens the door for a challenge of the 23.6% Fibonacci retracement at 0.7479. Alternatively, a push above the 14.6% Fib expansion at 0.7676 paves the way for a test of the next upside barrier at 0.7753, he 23.6% threshold.
The long-term AUD/USD trend continues to favor the downside. We expect this to continue, in line with our 2016 fundamental forecast. While RSI divergence is encouraging, it does not amount to an actionable short trade trigger by itself without more substantive evidence of reversal. As such, we will remain on the sidelines for the time being.
FXCM are heavily short AUD/USD.Find out what this means for the trend!