AUD/USD Technical Analysis: Blow-Off Top in the Works?
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- AUD/USD Technical Strategy: Flat
- Aussie Dollar extends to highest level since May 2015 against US cousin
- Negative RSI divergence may precede reversal but confirmation absent
The Australian Dollar renewed the upward push against its US counterpart following a brief period of consolidation below the 0.80 figure. Prices have now overcome this threshold, extending to the highest level in over two years. Still, negative RSI divergence warns that upside momentum may be ebbing.
Initial support is at 0.7972, the 14.6% Fibonacci expansion, with a turn back below that paving the way for a retest of the 0.7835-75 area (April 2016 high, July 21 low). Alternatively, a break above the 23.6% level at 0.8031 confirmed on a daily closing basis opens the door for a test of the 38.2% Fib at 0.8128.
An actionable trade setup is absent for now. RSI divergence is not a sufficiently conclusive signal by itself and the immediately available trading range is too narrow to justify taking a position from a risk/reward perspective. Standing aside seems most attractive.