AUD/USD Technical Analysis: Trend Reversal in the Works?
AUD/USD Technical Strategy: Flat
- Australian Dollar attempting to overturn near-term down trend
- Break of key resistance would clear path above the 0.79 figure
- Improved risk/reward and confirmation needed for trade setup
The Australian Dollar is on the verge of overturning the near-term down trend established from highs set in late January against its US counterpart. The pair formed a double top above 0.81. If the subsequent series of lower highs and lows is broken, the next leg of the longer-term advance from 2016 lows may begin.
A daily close above the 23.6% Fibonacci expansion at 0.7862 – a barrier reinforced by falling trend line resistance – exposes the 38.2% level at 0.7955 next. Alternatively, a move below chart inflection point support at 0.7732 paves the way for a challenge of another notable sticking point at 0.7636.
An actionable trade setup seems to be absent for now. On one hand, prices are too close to resistance to justify entering long from a risk/reward perspective. On the other, the absence of a bearish reversal signal warns against taking up the short side. With that in mind, standing aside seems most sensible.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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