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AUD/USD Technical Analysis: Monthly Trend Support at Risk

AUD/USD Technical Analysis: Monthly Trend Support at Risk

2016-04-28 00:08:00
Ilya Spivak, Head Strategist, APAC
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Talking Points:

  • AUD/USD Technical Strategy: Flat
  • Australian Dollar drops to monthly trend support after soft 1Q CPI data
  • Waiting for improved risk/reward to sell in line with long-term trend

The Australian Dollar turned lower against its US counterpart as expected after putting in a bearish Evening Star candlestick pattern. Prices are now challenging support capping the downside since early March. The move lower followed a disappointing set of first-quarter CPI figures.

Near-term trend line support is at 0.7549, with a break below that on a daily closing basis opening the door for a test of the 38.2% Fibonacci retracement at 0.7450. Alternatively, a reversal back above the 14.6% level at 0.7688 paves the way for a challenge of the 38.2% Fib expansion at 0.7834.

Risk/reward considerations argue against taking a short position in line with our 2016 fundamental forecastas prices sit squarely at support. We will remain on the sidelines for now, waiting for an actionable opportunity to sell AUD/USD to present itself.

Are you making this common mistake trading AUD/USD? Find out here!

AUD/USD Technical Analysis: Monthly Trend Support at Risk

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