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AUD/USD Technical Analysis: Poised to Test 11-Month Resistance

AUD/USD Technical Analysis: Poised to Test 11-Month Resistance

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Talking Points:

  • AUD/USD Technical Strategy: Flat
  • Aussie Dollar poised to test 11-month resistance vs. US counterpart
  • RSI divergence hints resistance will hold but confirmation is absent

The Australian Dollar is enjoying the longest winning streak in two months, with prices now poised to test resistance capping gains since August 2016. Negative RSI divergence warns that upside momentum may be fading however, opening the door for another rejection downward.

A daily close above resistance in the 0.7760-63 area (triple top, 50% Fibonacci expansion) paves the way for a challenge of the 61.8% level at 0.7808. Alternatively, a reversal back below the 38.2% Fib at 0.7718 sees the next downside barrier at 0.7662, the 23.6% expansion.

RSI divergence is not a sufficient to make for an actionable short trade setup by itself. Furthermore, sentiment trends continue to argue for an upside bias. Opting for the sidelines seems prudent for now until a better-defined setup presents itself.

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