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Talking Points:
- AUD/USD Technical Strategy: Flat
- Aussie Dollar clings to trend support but bearish cues continue to warn of topping
- Short position needs confirmation on a daily closing basis before being actionable
The Australian Dollar has managed to cling onto rising trend line support guiding the move higher since mid-December but signs of topping remain intact. The currency’s struggle to hold above the 2017 swing high coupled with negative RSI divergence – a sign of ebbing upside momentum – hint a drop may be ahead.
From here, a daily close below trend line support at 0.8028 opens the door for a test of the 23.6% Fibonacci retracement at 0.7986. Alternatively, a move back above 0.8066, an inflection point marked by the July 27 high, paves the way for another challenge of the September 8 top at 0.8125.
Clear-cut confirmation of a top remains elusive absent a clear breach of trend line support, warning against entering short prematurely. If support does hold, a viable bullish signal will be needed to justify taking up the long side. In the meantime, opting for the sidelines seems most prudent.
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