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AUD/USD Technical Analysis: Rally Runs Into Resistance

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Talking Points:

The Australian Dollar ran into resistance after rising as expected against its US counterpart following the appearance of a Piercing Line candlestick pattern. A daily close below the 14.6% Fibonacci expansion at 0.8772 exposes the 0.8659-94 area marked by the January 2014 low and the 23.6% level. Alternatively, a turn above the 23.6% Fib retracement at 0.8845 opens the door for a challenge of the 38.2% threshold at 0.8971.

We entered short AUDUSD at 0.9186 and have since taken profit on half ofour exposure. The rest remains open to capture further downside momentum with a stop-loss at 0.9085, our initial objective.

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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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