AUD/USD Technical Analysis: 15-Month Resistance Broken. Now What?
To receive Ilya's analysis directly via email, please SIGN UP HERE
- AUD/USD Technical Strategy: Flat
- Aussie Dollar soars to break 15-month resistance vs. US counterpart
- Betting on upside follow-through in the near term may be premature
The Australian Dollar soared past resistance capping gains since April 2016 against its US counterpart, hinting that a lasting trend reversal may be in progress. Explosive gains followed as Fed rate hike prospects fizzled after the failure of a US healthcare reform bill backed by the White House.
From here, a daily close above the 38.2% Fibonacci expansion at 0.7979 opens the door for a challenge of the 50% level at 0.8039. Alternatively, a reversal back below the 23.6% level at 0.7904 paves the way for a retest of the April 21 high at 0.7835, now recast as support.
While the magnitude of the move higher is certainly impressive, betting on lasting follow-through does not seem particularly attractive. Worrying economic news-flow raises a red flag as the spotlight turns to domestic affairs with the release of jobs data ahead. With that in mind, the sidelines seem most attractive.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.