AUD/USD Technical Analysis: Aussie Rallies Most in 2 Weeks

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Talking Points:

• AUD/USD Technical Strategy: Flat
• Australian Dollar rallies most in two weeks after Yellen commentary
• Waiting for opportunity to enter short in line with long-term down trend

The Australian Dollar pushed upward against its US namesake after finding support below the 0.75 figure, putting in the largest daily advance in two weeks. The move played out after comments from Fed Chair Janet Yellen diminished traders’ rate hike expectations.

From here, a daily close above the 23.6% Fibonacci expansion at 0.7679 opens the door for a test of the 38.2% level at 0.7803. Alternatively, a reversal below the 23.6% Fib retracement at 0.7479 paves the way for a challenge of the 38.2% threshold at 0.7354.

The overall AUD/USD trend remains bearish, which our 2016 fundamental forecast envisions will resume. With that in mind, we see recent gains as corrective and ultimately an opportunity to enter short at more attractive levels. An actionable trade setup is absent for now however and we will stand aside.

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