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Talking Points:
- AUD/USD Technical Strategy: Long at 0.7666
- Aussie Dollar breaks three-month down trend, hinting at bullish trend reversal
- Tactical long position activated, looking for move to test resistance above 0.77
The Australian Dollar looks poised to launch a recovery against its US counterpart after breaking above resistance guiding the down trend since early September. The currency capitalized on the greenback’s weakness after the FOMC rate decision as well as impressively upbeat local labor market data.
Nera-term resistance is in the 0.7733-40 area (October 6 low, 38.2% Fibonacci retracement), with a daily close above that opening the door for a test of the 50% level at 0.7813. Alternatively, a move back below resistance turned support at 0.7644 paves the way for another challenge of 0.7459.
The remaining portion of the AUD/USD short triggered at 0.7611 was stopped out at breakeven after profit was booked on half of exposure at the trade’s initial objective. A tactical long trade has now been activated at 0.7666, initially targeting 0.7714. A stop-loss will activate on a daily close below 0.7622.
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