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- AUD/USD Technical Strategy: Flat
- Support: 0.9318 (14.6% Fib exp.), 0.9259 (Flag top)
- Resistance: 0.9351 (trend line), 0.9390 (23.6% Fib exp.)
The Australian Dollar broke higher to complete a bullish Flag chart formation but the case for further gains lacks adequate confirmation for now. Prices are testing support-turned-resistance marked by a rising trend line set from late January (now at 0.9351). A break higher initially exposes the 23.6% Fibonacci expansion at 0.9390. Alternatively, a turn below the 14.6% level at 0.9318 clears the way for a retest of the Flag top, currently at 0.9259.
Risk/reward considerations argue against entering long with prices squarely at resistance. On the other hand, support is too close to justify a short from the same perspective. We will continue to stand aside for now, waiting for the pair to offer greater clarity before committing to a directional bias.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com