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Talking Points:
- AUD/USD Technical Strategy: Flat
- Support: 0.9034 (23.6% Fib exp.), 0.8986 (trend line from Jan)
- Resistance: 0.9085-0.9104 (Jan 13 high, 38.2% Fib exp.), 0.9159 (50% Fib exp.)
The Australian Dollar began to move higher against its US counterpart as expected, taking out resistance at 0.9034 marked by the 23.6% Fibonacci expansion. Prices are now testing the 0.9085-0.9104 area, marked by the 38.2% Fib and the January 13 high. A further push above this boundary targets the 50% level at 0.9159. Alternatively, a reversal below 0.9034 aims for rising trend line support at 0.8986.
Risk/reward considerations warn against taking a long position with prices trading squarely at relevant support. Meanwhile, a short position taken on the assumption that resistance will hold seems premature without a defined reversal signal. 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