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Talking Points:
- AUD/USD Technical Strategy: Flat
- Support:0.8620, 0.8531, 0.8441
- Resistance:0.8743, 0.8869, 0.8970
The Australian Dollar stumbled after turning higher as expected against its US namesake following the appearance of a Bullish Engulfing candlestick pattern. Near-term resistance is at 0.8743, the 23.6% Fibonacci retracement, with a break above that on a daily closing basis exposing the 38.2% level at 0.8869. Alternatively, a turn back below the 0.8620-59 are marked by the January 2014 lowand the 38.2% Fib expansion clears the way for a test of the 50% threshold at 0.8531.
The available trading range is too narrow to allow for a trade on the long or short side from a risk/reward perspective. We will continue to stand aside for the time being, waiting for a more compelling opportunity to present itself.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com