AUD/USD Technical Analysis: 2016 Trend Support at Risk
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- AUD/USD Technical Strategy: Flat
- Australian Dollar moves to threaten 2016 rising trend line support
- Waiting for actionable setup to re-establish short Aussie exposure
The Australian Dollar turned lower against its US counterpart as expected after putting in a bearish Evening Star candlestick pattern near the 0.77 figure. Prices are now threatening to challenge pivotal support that has guided the pair higher for most of the year, with a break potentially implying a major trend reversal.
From here, a daily close below the 50% Fibonacci expansion at 0.7551 opens the door for a test of 0.7514, the intersection of the 61.8% level and a rising trend line in play since mid-January. Alternatively, a reversal back above the 38.2% Fib at 0.7589 sees the next upside barrier at 0.7635, the 23.6% Fib.
A short AUD/USD trade triggered at 0.7570 was narrowly stopped out by yesterday’s daily close above 0.7597. Prices are now too close to near-term support to justify re-entering the position from a risk/reward perspective. Opting for the sidelines seems prudent until a better-defined opportunity presents itself.
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