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Talking Points:
- AUD/USD Technical Strategy: Flat
- Support:0.8659, 0.8568, 0.8466
- Resistance:0.8772, 0.8845, 0.8971
The Australian Dollar recoiled downward after rising as expected against its US counterpart, with sellers attempting to clear a path below 0.8600. Near-term is in the 0.8659-94 area, marked by the January 2014 low and the 23.6% Fibonacci expansion, with a break below that on a daily closing basis exposing the 38.2% level at 0.8568. Alternatively, a reversal above the 14.6% expansion at 0.8772 targets the 23.6% Fib retracement at 0.8845.
While the dominant trend appears to favor the downside, prices are too close to support to justify entering short from a risk/reward perspective. Furthermore, a bullish Piercing Line candlestick pattern formed last week remains technically valid absent a close below the pattern’s low (0.8641). With that in mind, we will wait on the sidelines for now.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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