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Talking Points:
- AUD/USD Technical Strategy: Flat
- Australian Dollar chart setup hints at corrective recovery brewing ahead
- Looking to any on-coming gains as an opportunity to enter short position
The Australian Dollar technical positioning hints prices may correct higher after finding support above the 0.72 figure against the currency’s US counterpart. The appearance of a Hammer candlestick points to indecision following a selloff while positive RSI divergence hints at ebbing downward momentum.
A daily close above the 50% Fibonacci retracement at 0.7331 paves the way for a test of the 38.2% level at 0.7450. Alternatively, a push through the 61.8% Fib at 0.7212 opens the door for a challenge of the 76.4% retracement at 0.7065.
Upside reversal cues are tentative for now and confirmation is needed before the setup is actionable. Furthermore, expectations for 2016 fundamental trendspoint to a broadly bearish AUD/USD bias. With that in mind, we will stand aside and wait for any on-coming bounce to offer a selling opportunity.
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