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Talking Points:
- AUD/USD Technical Strategy: Flat
- Support: 0.9242 (trend line, 38.2% Fib ret.), 0.9174 (50% Fib ret.)
- Resistance: 0.9325 (23.6% Fib ret.), 0.9377 (14.6% Fib ret.)
The Australian Dollar fell against its US counterpart as expected after prices produced a Shooting Star candlestick below the 0.95 figure. Prices are approaching key support at 0.9242 marked by the 38.2% Fibonacci retracement and a rising trend line set from late January. A break downward on a daily closing basis initially exposes the 50% level at 0.9174. Alternatively, a reversal above the 23.6% Fib at 0.9325 aims for the 14.6% retracement at 0.9377.
It is unclear whether the pullback April’s high represents a correction or a genuine downward trend reversal. With that in mind, we will wait to see how the pair behaves at trend line support to establish a directional bias and take a position.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com