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AUD/USD Technical Analysis: Aussie Declines Most in a Month

AUD/USD Technical Analysis: Aussie Declines Most in a Month

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • AUD/USD Technical Strategy: Flat
  • Aussie Dollar stumbles after testing 0.75 vs. USD, drops most in a month
  • Clear-cut technical positioning, improved risk/reward sought for trade

The Australian Dollar has turned lower against its US namesake as expected after hitting the highest level in six weeks and testing above the 0.75 figure. Prices have suffered the largest two-day drop since mid-May but follow-through hinges on a deeply conflicted fundamental landscape.

Near-term support is at 0.7341, the 23.6% Fibonacci expansion, with a break below that on a daily closing basis opening the door for a challenge of the 38.2% level at 0.7241. Alternatively, a reversal above the 38.2% Fib retracement at 0.7409 paves the way for a retest of the 50% threshold at 0.7490.

The available trading range is too narrow to justify taking up long or short exposure from a risk/reward perspective. Potent event risk on the docket only compounds the desire for clear-cut technical confirmation. With that in mind, opting to remain flat for now seems like the most attractive alternative.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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