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Talking Points:
- AUD/USD Technical Strategy: Flat
- Australian Dollar extends to the highest in 10 months vs. US counterpart
- Lack of actionable trade setup, adverse risk/reward argue for flat posture
The Australian Dollar continues to push higher against its US counterpart, with prices advancing to the highest level in ten months. Momentum may be slowing however, with the ATR measure of volatility dropping to the lowest in a month on rolling 20-day studies.
Near-term resistance is at 0.7834, the 38.2% Fibonacci expansion, with a break above that on a daily closing basis opening the door for a test of the 50% level at 0.7940. Alternatively, a move back below the 23.6% Fib at 0.7703 paves the way for a challenge of the 14.6% expansion at 0.7622.
An actionable trade setup is absent at this time. On one hand, prices are too close to resistance to enter long from a risk/reward perspective. On the other, the absence of a clear-cut bearish reversal signal hints it is premature to attempt to short. As such, we will remain flat for now.
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