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Talking Points:
- AUD/USD Technical Strategy: Flat
- Aussie Dollar carves out bullish candle pattern at channel floor
- Upswing seen as corrective in the context of a larger down trend
The Australian Dollarput in a bullish Morning Star candlestick pattern at channel support, hinting a move higher against its US namesake is ahead. Any gains in the context of current positioning would be corrective however, with the overall trend bias still seemingly favoring the downside.
Near-term resistance is at 0.7415, the 14.6% Fibonacci expansion. A daily close above that opens the door for a test of the 0.0.7456-84 area (neckline, 23.6% level, channel top). Alternatively, a reversal below channel floor support at 0.7307 paves the way for a challenge of the December 2016 low at 0.7160.
Prices are too close to resistance to justify taking a tactical long position from a risk/reward perspective. With that in mind, opting for the sidelines seems most compelling for now as the retracement runs its course and ultimately presents an opportunity to sell in line with the longer-term trajectory.
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