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Talking Points:
- AUD/USD Technical Strategy: Flat
- Support:0.9310-18, 0.9270, 0.9239-45
- Resistance: 0.9369, 0.9401, 0.9440
The Australian Dollar may be preparing to reverse downward against its US counterpart following the appearance of a Bearish Engulfing candlestick formation. A daily close below the 0.9310-18 area marked by a rising trend line support set from late August at and the 23.6% Fibonacci expansion exposes the 38.2% level at 0.9270. Alternatively, a turn above the intersection of the 50% Fib retracement and a falling channel top at 0.9369 clears the way for a test of the 61.8% threshold at 0.9401.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. With that in mind we will remain flat for now.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com