AUD/USD Technical Analysis: Key Trend Line Held for Now
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- AUD/USD Technical Strategy: Flat
- Australian Dollar rebounds from 2016 rising trend support line
- Risk/reward parameters, looming event risk argue for the sidelines
The Australian Dollar is attempting to build higher against its US counterpart after finding support at a rising trend line set from late January. A sustained recovery looks far from assured however as critical event risk looms ahead, threatening to rekindle selling pressure.
Near-term resistance is at 0.7532, the 14.6% Fibonacci expansion, with a break above that on a daily closing basis opening the door for a test of the 23.6% level at 0.7587. Alternatively, a reversal below the 50% Fib retracement at 0.7452 paves the way for a test of challenge of the 61.8% threshold at 0.7380.
Prices’ proximity to near-term resistance argues against entering long from a risk/reward perspective while the absence of a clear bearish reversal signal hints taking the short side is premature. Finally, looming fundamental risk threatens to materially alter positioning. The sidelines look most attractive for now.